Toyota announces plants in Mexico and China, ending its pause on new plants after recall mess



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FILE - In this Nov. 20, 2014 file photo, the 2015 Toyota Camry is on display at the Los Angeles Auto Show in Los Angeles. Toyota is building two new auto plants, one in Mexico and the other in China, ending a three-year hiatus from such ambitions that the Japanese automaker voluntarily imposed on itself after a massive recall scandal. Toyota Motor Corp. announced Wednesday, April 15, 2015 it will invest $1 billion for the plant in Guanajuato, Mexico, creating 2,000 jobs, to make the Corolla subcompact - one of Toyota’s biggest hits. (AP Photo/Jae C. Hong, File)


FILE - In this March 15, 2013 file photo, Indonesian workers assemble passenger cars at the new Toyota plant in Karawang, West Java, Indonesia after Toyota officially opened their second manufacturing plant in the country. Toyota is building two new auto plants, one in Mexico and the other in China, ending a three-year hiatus from such ambitions that the Japanese automaker voluntarily imposed on itself after a massive recall scandal. Toyota Motor Corp. announced Wednesday, April 15, 2015 it will invest $1 billion for the plant in Guanajuato, Mexico, creating 2,000 jobs, to make the Corolla subcompact - one of Toyota’s biggest hits. (AP Photo/Tatan Syuflana, File)


TOKYO — Toyota plans to build new auto assembly plants in Mexico and China, ending a self-imposed 3-year break from expansion over quality concerns due to massive recalls.

Toyota Motor Corp. announced Wednesday it will invest $1 billion in the plant in the Mexican state of Guanajuato, creating 2,000 jobs to make the Corolla compact car, the company's second-biggest seller in the U.S.

Production is to start in 2019, with annual output estimated at 200,000 vehicles. That will consolidate Corolla production for North America in that plant and Toyota's plant in Blue Springs, Mississippi.

Toyota will stop producing Corollas at its plant in Ontario, Canada, which will instead focus on more expensive mid-size vehicles. Toyota did not give specifics. The plant now produces Lexus models, the RAV4 sport-utility vehicle and the Matrix hatchback, in addition to the Corolla.

Also, Toyota is adding a third assembly line next to its plant in Guangzhou, China, investing 52.5 billion yen ($440 million). The line is to be completed by 2017, for a model it declined to disclose.

Annual production capacity will go up by 100,000 vehicles. The new line won't create new jobs because the existing two lines will become more efficient, reducing the number of workers needed, according to Toyota.

A Toyota executive, briefing reporters in Tokyo over a video connection from Nagoya in central Japan, said Mexico and China were chosen because they are two markets where auto demand is expected to rise in coming years.

Toyota's investment in Mexico follows a string of major projects by other automakers, and President Enrique Pena Nieto said it shows the country is as an "optimal place for global companies to invest and thereby expand their presence in the entire world."

On Friday, Ford Motor Co. is expected to announce a $2.5 billion investment to expand Mexican engine and transmission factories to build a new 1.5-Liter four-cylinder gasoline engine and complex multi-speed transmissions.

Pena Nieto said Mexico's advantages include qualified workers and good labor relations.

Toyota has been working on a strategy for growth called Toyota New Global Architecture based on more widespread sharing among models of platforms, or the basic parts on which cars are built, as well as other components.

The "architecture" is based on a leaner, smarter approach to production, aiming to become as competitive and as fail-proof as possible in quality. The first cars under the system are to roll out later this year.

Acknowledging the company had grown too fast, Toyota President Akio Toyoda put on hold for the past three years any plans for new plants after the recall fiasco which began in 2009.

More than 10 million Toyota vehicles were recalled around the world for faulty brakes, sticky gas pedals, ill-fitting floor mats and a range of other defects.

Toyota is still embroiled, along with other automakers, in a recall involving air bags made by Takata Corp. of Japan which can deploy and rupture with enough force to cause injury or death.

It has been eager to put the recall woes behind it, but Toyoda has repeatedly stressed future growth must be "sustainable" and ensure quality.

"An increase in production does not mean an undisciplined pursuit of more," he said in a statement Wednesday.

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