Toyota president wants a review of possible expansion in Mexico

Article by Andrew Christian, on September 17, 2014

The president of Toyota Motor Corp., Akio Toyoda, wants the team tasked to search for a location for building a new compact car assembly site in Mexico to re-review the move by yearend, four executives privy with the matter told Reuters. Toyota had targeted to start production of Corolla in Mexico in a few years.

The executives remarked that while momentum had been building for a decision this summer on the expansion, but the carmaker’s top honcho wants planners to reconsider the move. "There’s absolutely no unused capacity lying around anywhere in North America?”

Toyoda was quoted by one of the executives as asking. The executive said Toyoda noted that adding capacity to trigger growth is what had placed Toyota into trouble before. Two Toyota executives told Reuters that it is high likely that a decision would not be made this year.

One of them remarked that Toyota might go ahead with the site, but would scale its capacity or delay the start of construction. While it does not have an assembly site for building passenger cars in Mexico, Toyota already operates pick-up truck plant in Baja California that could build 63,000 Tacoma vehicles annually.

That site also has no capability to produce passenger cars. A spokesman for Toyota said that the carmaker has yet to make any decision on a new plant in Mexico.

Toyoda had blamed the carmaker’s first operating loss in 2009 as well as its massive global recall crisis in 2009-2010 on his predecessors “blind pursuit” of volume and high margins. He then re-shifted Toyota focus on product and quality, and has barred the carmaker to add new capacity through 2016. [source: Reuters.com]

Topics: toyota, mexico, plant

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