Toyota to invest 7.96 billion yuan for new China, Mexico plants
Toyota Motor Corp. plans to spend $1.3 billion (7.96 billion yuan) to build two assembly plants in China and Mexico, two people familiar with plans told Reuters.
That would end a three-year freeze imposed after unchecked growth burdened the world's biggest automaker with too many idle production lines.
In China, the world's biggest auto market, the new plant will be in the city of Guangzhou. It will produce up to 100,000 Yaris subcompacts a year, starting in 2018, the people said.
Reuters reported in January that plans were in place for new plants in the two countries, awaiting a green light from top management that has now been given. President Akio Toyoda had been cautious about expanding after Toyota was hit by a capacity glut following the global financial crisis.
The new plants will raise Toyota's annual production capacity by nearly 300,000 cars, the two people said -- 200,000 in Mexico and up to 100,000 in China. They declined to be identified because they are not authorized to speak to the media, and said the expansion may be announced formally as early as this month.
The Wall Street Journal also reported on the plans.
The renewed expansion drive by Toyota will put more pressure on rivals such as General Motors and Volkswagen AG, in a global automotive industry still burdened by being able to make more cars than it can sell. The increase in global production capacity of up to 300,000 compares with sales of just over 10 million in 2014.
Immediately after the financial crisis, big carmakers were cautious about adding production capacity. Now, with demand in the United States back at pre-crisis levels and China's auto market growing, albeit more slowly, expansion is back on the agenda.
A Toyota spokeswoman said nothing had been decided.
In China, the world's biggest auto market, the new plant will be in the city of Guangzhou. It will produce up to 100,000 Yaris subcompacts a year, starting in 2018, the people said.
Reuters reported in January that plans were in place for new plants in the two countries, awaiting a green light from top management that has now been given. President Akio Toyoda had been cautious about expanding after Toyota was hit by a capacity glut following the global financial crisis.
The new plants will raise Toyota's annual production capacity by nearly 300,000 cars, the two people said -- 200,000 in Mexico and up to 100,000 in China. They declined to be identified because they are not authorized to speak to the media, and said the expansion may be announced formally as early as this month.
The Wall Street Journal also reported on the plans.
The renewed expansion drive by Toyota will put more pressure on rivals such as General Motors and Volkswagen AG, in a global automotive industry still burdened by being able to make more cars than it can sell. The increase in global production capacity of up to 300,000 compares with sales of just over 10 million in 2014.
Immediately after the financial crisis, big carmakers were cautious about adding production capacity. Now, with demand in the United States back at pre-crisis levels and China's auto market growing, albeit more slowly, expansion is back on the agenda.
A Toyota spokeswoman said nothing had been decided.
