Toyota Scales Back Its New Guanajuato Mexico Plant

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Auto maker to reduce investment from $1 billion to $700 million

Texas Border Business

Toyota Motor Corporation confirmed that Mexico’s new automotive plant is being scaled back. The investment for the Celaya, Guanajuato plant in Mexico, set to be running in 2019, falls to $700 million from the $1 billion commitment announced in 2015. Annual production will decrease by half to 100,000 units, the company said.

The initial plan was to build 200,000 Corolla subcompacts a year, but executive vice-president Didier Leroy told reporters at the Tokyo Motor Show that production will go to a new plant being planned with Mazda Motor Corporation in the U.S.  The Mexico plant will build Tacoma trucks to meet growing demand. It is part of Toyota’s overall realignment of North American production, he said.

Trump has expressed his opposition to Toyota’s Mexico plant, threatening tariffs, and has welcomed Toyota’s plans for a U.S. plant with Mazda. Japanese automakers are nervous about a political backlash in the U.S. after having suffered “Japan-bashing” in the 1980s over exports that were thought to be taking jobs away from American workers.

Toyota and Mazda announced the U.S. plant in August in a partnership that also includes collaboration on electric vehicles. A Toyota plant in Texas already makes trucks for the U.S. market, but demand is growing.

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