Donald Trump threatens Toyota with tax on imports of Mexican-made vehicles
President-elect incorrectly states company is planning to move Corolla production to Baja
U.S. president-elect Donald Trump has taken aim at another automaker over its production in Mexico, this time threatening Toyota Motor Corp. with a tax on vehicles brought into the United States.
Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.—@realDonaldTrump
Toyota currently builds about 100,000 pickup trucks and truck beds annually in Baja California in northwestern Mexico, and plans to raise that output to about 160,000 by 2018.
Trump has the location of the new plant wrong. The company revealed in April 2015 that it would spend $1 billion on an assembly plant in Guanajuato, which is in central Mexico, and move production of its popular Corolla sedan there from another plant in Cambridge, Ont.
When it comes online in 2019, the Guanajuato factory will have the capacity to crank out 200,000 cars a year, bringing an end to the production of the Corolla in Canada. It is one of the bestselling cars in Canada and had been built here since the plant opened in the 1980s. The company said back in 2015 that the plant would "switch from producing Corollas to mid-sized, higher-value vehicles."
Toyota will also continue building Corollas in the U.S. at a plant in Blue Springs, Miss.
Employment in U.S. 'will not decrease'
"Production volume or employment in the U.S. will not decrease as a result of our new plant in Guanajuato, Mexico announced in April 2015," Toyota's U.S. division said in a statement on its website.
"With more than $21.9 billion direct investment in the U.S., 10 manufacturing facilities, 1,500 dealerships and 136,000 employees, Toyota looks forward to collaborating with the Trump Administration to serve in the best interests of consumers and the automotive industry," the company said.
On the New York Stock Exchange, Toyota Motor Corp. American depositary receipts closed down 69 cents at $120.44 US, with a sharp drop coming in the immediate wake of Trump's tweet.
Toyota's shares fell 1.7 per cent Friday in Tokyo.
Earlier Thursday, the heads of Toyota and Honda both said they had no immediate plans to curb their vehicle production in Mexico, preferring to wait until after Trump is inaugurated on Jan. 20 before making any decisions.
"We will consider our option as we see what policies the incoming president adopts," Toyota president Akio Toyoda said in Tokyo, according to Reuters.
Trump fired a shot at General Motors earlier this week, threatening a tax on Mexican-made Chevy Cruze production that gets imported into the United States.
Shortly after Trump tweeted that threat at GM, Ford announced it was dropping plans for a new $1.6 billion US plant in Mexico, a move that was criticized by Trump during last year's presidential primary campaign.
Instead, Ford said it will invest about $700 million in a Michigan factory that will build high-tech autonomous and electric vehicles.
At the same time, however, Ford said it will continue with plans to build its new Focus small car at an existing plant in Hermosillo, Mexico, in order to boost company profitability.
With files from Reuters and The Associated Press