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Business

Toyota delays opening of Mexican plant until 2020

Suppliers told to halt preparation for Corolla and plan for Tacoma

Members of Toyota's leadership and the Mexican government attend a groundbreaking ceremony at the automaker's Mexico plant in 2016.

TOKYO -- Toyota Motor has decided to push back the opening of its new assembly plant in Mexico from 2019 to the first half of 2020, as the company now plans to produce Tacoma pickups instead of Corolla compacts at the plant.

Demand for the Tacoma has been strong in the U.S. fueled by cheaper gasoline prices. Increasing Tacoma production had been a key issue for Toyota management. Delaying the Mexico plant offers time for suppliers to accommodate the change in plans.

Toyota has just announced a plan to open a new plant in the U.S. in partnership with Mazda Motor sometime around 2021, with an annual capacity of 300,000 units.

President Trump's had tweeted that there was "no way" that Toyota would be allowed to proceed with a plant in Mexico to export Corolla's into the U.S.

Pickup trucks and other large vehicles increased their share of the U.S. new vehicle market in 2016 to about 60%. Toyota plans to assemble only Tacomas at the Mexican plant.

The design of the Tacoma, which is about 5 meters long and has a bed, is different from that of the Corolla. The truck also requires different parts. Toyota's suppliers have been informed to halt preparations for Corolla production and to get ready for Tacoma production prior to the plant opening.

Parts suppliers are already reviewing their supply chains and adjusting local production specifications in an effort to help the plant open as early as possible, a Toyota representative said.

The Corolla will continue to be produced at an existing plant in the U.S. state of Mississippi. Toyota also plans to produce the car in Japan for export to the U.S. if necessary.

(Nikkei)

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