Toyota Motor stated on Friday it planned to develop pickup trucks and perhaps SUVs at a new plant in Mexico, a plan that followed threats by U.S. President Donald Trump to penalize the automaker if it constructed small cars south of the border.
Toyota at first planned to produce Corolla sedans at the plant it is developing in the main state of Guanajuato however will now change production of the small vehicles and a new Mazda SUV crossover to a new assembly plant prepared for the United States.
Trump threatened in January to impose a large fee on the automaker if it developed Corollas for the U.S. market in Mexico.
Toyota de Mexico spokesperson Luis Lozano stated the international automaker would study producing SUVs in Guanajuato, along with the Tacoma truck model.
“We’re going to focus only on pickups at the start and are studying the possibilities for SUVs in the future,” he stated. Trucks and SUVs accounted for 65 percent of the North American market, Lozano stated.
The decision came as Toyota prepared to take a 5 percent share of smaller Japanese rival Mazda Motor as part of an alliance that will see the two construct a $1.6 billion U.S. assembly plant and collaborate on electric automobiles.
A move to produce SUVs in Guanajuato would leave an extension of a “burgeoning trend” of Mexican production meeting quality standards needed to produce more costly vehicles, said Christopher Wilson of the Woodrow Wilson International Center.
“Instead of building lower worth cars that generally offer smaller margins in Mexico and keeping high-value SUV and high-end design production in the U.S., they are relocating the opposite instructions,” said Wilson, deputy director of the think tank’s Mexico institute.
“The moves by Toyota appear to be designed to decrease political pressure on the company from President Trump,” he added.
Toyota’s Lozano informed a Mexico radio station later on Friday he expected the business’s level of investment in the region to remain comparable in spite of the shift in plans.
“The investment that we calculated when we announced the choice to make a plant for Corolla was for $1 billion dollars,” he stated.
“Right now, we don’t have a final figure for what this modification indicates for our evaluations. Up to now, it appears it will not vary substantially,” Lozano informed.