Toyota to move Corolla production to Mexico to cut costs
(Reuters) – Toyota Motor Corp 7203.T, the world’s biggest automaker, plans to move production of its Corolla compact cars to a new factory in Mexico from Canada to benefit from lower costs, the Globe and Mail reported, citing sources familiar with the situation.
Costs at Toyota’s assembly plants at Cambridge and Woodstock in Ontario are higher than at its U.S. factories and it makes sense to produce the more expensive vehicles in Canada, the newspaper quoted sources familiar with the matter as saying.
Sources told Reuters that Toyota will spend $1 billion to build a car factory in Mexico, which is expected to begin functioning from the summer of 2019, ending a self-imposed three-year freeze on new investments. Toyota also plans to announce a new car factory in Guangzhou, China, this week.
Toyota’s plant in Cambridge, Ontario is expected to produce larger vehicles after the Mexican plant begins production, the newspaper said, citing sources familiar with the situation.
Representatives of Toyota in Canada were not immediately available for comment.
(Reporting by Zara Mascarenhas in Bengaluru; Editing by Anupama Dwivedi)
News courtesy: Reuters
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