Report: Toyota close to approval of Mexican factory image

Three sources that have knowledge of the company’s strategy have reported that Toyota Motor, the world’s largest automaker, is close to summing up its plans for a new passenger car assembly facility, its first in Mexico.

The three people that spoke to Reuters under condition of anonymity because there has been no public announcement on the matter yet, claim that Toyota would move to approve the plant through a board vote as early as next month. The factory would be tasked to produce the popular Corolla compact sedan and start production sometimes around 2019 – and after seeing the latest investments in Mexico from competing automakers, including second-largest worldwide automaker VW AG, the necessary investment for the new production facility would be of more than $1 billion for Toyota. If the production expansion plan does get approved, it would also signal the end of the 3-year expansion freeze coming from the top – the Japanese automaker’s president Akio Toyoda. The official believes that aggressive production expansion was one of the causes that led to recent quality issues and contributed to the 2009 unintended acceleration recall debacle.

Japan’s Toyota would be the final, and maybe most important, global automakers to have Mexico as a crucial production and export hub, with the country bringing carmakers and suppliers in thanks to its low labor costs and tariff-free access to numerous crucial markets, including neighboring United States. The second-largest global auto market is also Toyota’s largest single market.

Via Reuters