Toy­ota build­ing plants world­wide; seeks growth

The China Post - - WORLD BUSINESS - BY YURI KAGEYAMA

Toy­ota plans to build new auto as­sem­bly plants in Mex­ico and China, end­ing a self- im­posed 3- year break from ex­pan­sion over qual­ity con­cerns due to mas­sive re­calls.

Toy­ota Mo­tor Corp. an­nounced Wed­nes­day it will in­vest US$ 1 bil­lion in the plant in the Mex­i­can state of Gua­na­ju­ato, cre­at­ing 2,000 jobs to make the Corolla com­pact car, the com­pany’s sec­ond- big­gest seller in the U. S.

Pro­duc­tion is to start in 2019, with an­nual out­put es­ti­mated at 200,000 ve­hi­cles. That will con­sol­i­date Corolla pro­duc­tion for North Amer­ica in that plant and Toy­ota’s plant in Blue Springs, Mis­sis­sippi.

Toy­ota will stop pro­duc­ing Corol­las at its plant in On­tario, Canada, which will in­stead fo­cus on more ex­pen­sive mid- size ve­hi­cles. Toy­ota did not give specifics. The plant now pro­duces Lexus mod­els, the RAV4 sportu­til­ity ve­hi­cle and the Ma­trix hatch­back, in ad­di­tion to the Corolla.

Also, Toy­ota is adding a third as­sem­bly line next to its plant in Guangzhou, China, in­vest­ing 52.5 bil­lion yen ( US$ 440 mil­lion). The line is to be com­pleted by 2017, for a model it de­clined to dis­close.

An­nual pro­duc­tion

ca­pac­ity will go up by 100,000 ve­hi­cles. The new line won’t cre­ate new jobs be­cause the ex­ist­ing two lines will be­come more ef­fi­cient, re­duc­ing the num­ber of work­ers needed, ac­cord­ing to Toy­ota.

A Toy­ota ex­ec­u­tive, brief­ing re­porters in Tokyo over a video con­nec­tion from Nagoya in cen­tral Ja­pan, said Mex­ico and China were cho­sen be­cause they are two mar­kets where auto de­mand is ex­pected to rise in com­ing years.

Toy­ota’s in­vest­ment in Mex­ico fol­lows a string of ma­jor projects by other au­tomak­ers, and Pres­i­dent Enrique Pena Ni­eto said it shows the coun­try is as an “op­ti­mal place for global com­pa­nies to in­vest and thereby ex­pand their pres­ence in the en­tire world.”

On Fri­day, Ford Mo­tor Co. is ex­pected to an­nounce a US$ 2.5 bil­lion in­vest­ment to ex­pand Mex­i­can en­gine and trans­mis­sion fac­to­ries to build a new 1.5- Liter four- cylin­der gaso­line en­gine and com­plex multi- speed trans­mis­sions.

Pena Ni­eto said Mex­ico’s ad­van­tages in­clude qual­i­fied work­ers and good la­bor re­la­tions.

Toy­ota has been work­ing on a strat­egy for growth called Toy­ota New Global Ar­chi­tec­ture based on more wide­spread shar­ing among mod­els of plat­forms, or the ba­sic parts on which cars are built, as well as other com­po­nents.

The “ar­chi­tec­ture” is based on a leaner, smarter ap­proach to pro­duc­tion, aim­ing to be­come as com­pet­i­tive and as fail- proof as pos­si­ble in qual­ity. The first cars un­der the sys­tem are to roll out later this year.

Ac­knowl­edg­ing the com­pany had grown too fast, Toy­ota Pres­i­dent Akio Toy­oda put on hold for the past three years any plans for new plants af­ter the re­call fi­asco which be­gan in 2009.

More than 10 mil­lion Toy­ota ve­hi­cles were re­called around the world for faulty brakes, sticky gas ped­als, ill- fit­ting floor mats and a range of other de­fects.

Toy­ota is still em­broiled, along with other au­tomak­ers, in a re­call in­volv­ing air bags made by Takata Corp. of Ja­pan which can deploy and rup­ture with enough force to cause in­jury or death.

It has been ea­ger to put the re­call woes be­hind it, but Toy­oda has re­peat­edly stressed fu­ture growth must be “sus­tain­able” and en­sure qual­ity.

“An in­crease in pro­duc­tion does not mean an undis­ci­plined pur­suit of more,” he said in a state­ment Wed­nes­day.

AP

In this Nov. 20, 2014 file photo, the 2015 Toy­ota Camry is on dis­play at the Los An­ge­les Auto Show in Los An­ge­les.

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