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WASHINGTON/TOKYO: Toyota on Tuesday said it will scale back investment in a planned plant in Mexico by 30 percent to $700 million (SR2.81 billion) and cut planned annual capacity in half to 100,000 vehicles as it shuffles its production plans to meet market demands.
Toyota Executive Vice President Didier Leroy said the decision was made to enable the automaker to produce more of its pick-up truck models, which are in strong demand in its key North American market.
鈥淥ur biggest concern today in the way we produce cars in North America 鈥� we don鈥檛 have enough trucks,鈥� Leroy told reporters at the Tokyo Motor Show.
鈥淲e now can have a hub between Texas, Baja, California, and the new plant in Mexico, and in the three different locations we will produce the Tundra and the Tacoma, which is the best in terms of global supply for the North American market.鈥�
He added that the change in plans, under which the company initially intended to build a $1 billion dollar plant, did not alter the automaker鈥檚 our long-term commitment to Mexico, saying that it could raise production capacity in the future.
In August, Toyota and Mazda said they would jointly build a $1.6 billion US assembly plant, with Toyota saying it would build Corolla cars at the new venture rather than in Guanajuato, and switch to building Tacoma pickups in Mexico.
Spokesman Scott Vazin said the change was not a result of fears that the United States could withdraw from the North American Free Trade Agreement, but came after Toyota went 鈥渂ack to the drawing board on rationalizing our production strategy for North America,鈥� following the Mazda deal.
鈥淲e are not moving production back to the United States,鈥� Leroy said. 鈥淲e just had an opportunity to develop a new factory with Mazda.
鈥淲e are not playing any political games,鈥� he added.
US President Donald Trump has threatened tariffs to curb auto imports and is working with Republican officials to woo investment in domestic production.