Toyota Eying More Mexico Manufacturing

Commentary by John Paul McDaris

This AutoNews article touched on the speculation in the auto industry about when and in which part of Mexico Toyota will expand. The company has had a final assembly plant for the Tacoma pickup in Tijuana for a while, and the company recently signed a deal with Mazda to acquire 50,000 annual units of the Mazda2 subcompact, which will replace the Yaris in Toyota’s lineup, made in Salamanca, Mexico. Thus many are speculating that Toyota will join the other OEMs in a move to the central Mexico region.

The local Mexican market is a big motivator for Toyota to expand production in Mexico – it’s not just all about export. Toyota has just a 5% market share in Mexico, and management is eager to see that grow.

To me, the story here is about another big manufacturer looking at the domestic Mexican market, realizing the opportunities presented by Mexico’s growing middle class, and rushing to take advantage of them before the competition does. Toyota doesn’t want to miss out.

Of course, any expansion by the carmaking companies leads to more opportunities for Tier 1, Tier 2 and Tier 3 suppliers, who are also acutely aware of the topline growth possibilities in Mexico.

Source: AutoNews (Paid subscription required)

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