Even more reports are now surfacing about Toyota’s prospective production freeze end, with the largest automaker in the world reportedly ready to invest $1 billion to build a new car plant in Mexico.
According to two persons that have first hand knowledge of the plans, the biggest Japanese carmaker is preparing to make the investment public this Wednesday, with the new auto factory creating 2,400 new jobs in the process. The assembly facility will have a total production output capacity of 200,000 units annually and will be constructed in the central state of Guanajuato, said one of the sources, both declining to be named as the investment has not been publicly announced yet. An earlier Reuters report stated the new factory would be used to manufacture the Corolla compact car beginning with the summer of 2019. This would be Toyota’s first foray into the Mexican auto industry, and also the end to the self-imposed three-year freeze on big spending needed to address manufacturing and quality concerns. The Mexican auto industry is also one of the fastest growing in the region, thanks to the low employment cost, geographical positioning between the two major American regions and a web of trading agreements reaching al the corners of the world.
According to the sources, the event in Mexico on Wednesday would be attended by the country’s president Enrique Pena Nieto. Previously, Toyota President Akio Toyoda had issued an expansion freeze to make sure the rising production levels did not affect quality – lesson learned back in 2010 back when Toyota was hit with the massive unintended acceleration recall. But Toyota now also needs to fend off the competition – Germany’s Volkswagen AG and America’s General Motors, with all three selling around 10 million vehicles each year now.