Toyota Motor on Tuesday stated it will downsize investment in a planned plant in Mexico by 30 percent to $700 million and slash scheduled yearly capacity in half to 100,000 vehicles as it mixes its production plans to fulfill market demands.
Toyota Executive Vice President Didier Leroy stated the decision was made to allow the automaker to produce more of its pick-up truck models, which are in strong demand in the its crucial North American market.
“Our biggest concern today in the way we produce vehicles in North America– we do not have enough trucks,” Leroy informed reporters at the Tokyo Motor Show.
“We now can have a hub between Texas, Baja, California, and the new plant in Mexico, and in the 3 different places we will produce the Tundra and the Tacoma, which is the best in terms of international supply for the North American market.”
He included that the modification in plans, under which the company at first meant to build a $1 billion dollar plant, did not change the automaker’s our long-lasting commitment to Mexico, saying that it could raise production capability in the future.
In August, Toyota and Mazda Motor stated they would jointly build a $1.6 billion U.S. assembly plant, with Toyota stating it would develop Corolla cars at the new venture instead in Guanajuato, and switch to building Tacoma pickups in Mexico.
Spokesman Scott Vazin stated the change was not an outcome of worries that the United States could withdraw from the North American Free Trade Agreement (NAFTA), but followed Toyota’s decision to go “back to the drawing board on justifying our production strategy for North America,” after the Mazda deal.