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Toyota to Build 2nd Plant in Tijuana

Autos: Light truck factory and pickup bed facility under construction nearby are part of a major North American expansion.

September 20, 2002|JOHN O'DELL | TIMES STAFF WRITER

Toyota Motor Corp. will announce this morning plans to build a truck assembly plant in Tijuana, part of a major North American expansion. Today's announcement ends months of speculation about the Japanese auto maker's plans for enlarging its presence in Mexico.

The plant will be built on a 700-acre site Toyota owns in the Baja California border city.

Toyota is already building a plant there for production of pickup truck beds for its small pickup, the Tacoma. Company sources said Thursday that the new factory will use the remainder of the property and be dedicated to light trucks--a category that could include the Tacoma; Toyota's other, larger pickup, the Tundra; or sport utility vehicles.

Toyota builds 150,000 Tundras a year at New United Motor Manufacturing Inc. in Fremont in Northern California, a joint venture of Toyota and General Motors Corp. A NUMMI spokesman said Thursday that the new Tijuana assembly plant will not affect the California facility.

Sources at Torrance-based Toyota Motor Sales USA said the new truck facility in Baja would increase Toyota's overall production.

It is expected that the Tijuana plant will turn out trucks for the Mexican and U.S. markets.

Rising wages and low interest rates in Mexico have spurred Toyota sales there in the last year. The firm's U.S. sales have risen as well, prompting Toyota to look for ways to produce more cars and trucks closer to where they're sold.

In addition to the Tijuana truck bed and truck assembly plants, Toyota has said it will increase production capacity at its car and truck factory in Ontario, Canada.

Economic development officials in Alabama told the Birmingham News this week that Toyota is seeking a site in the Southern states for a $750-million automotive assembly plant.

The Canadian expansion would add 30,000 vehicles a year at the Ontario plant, for a total of 250,000. The increase would boost employment there by 700 to 3,900. A new U.S. plant probably would employ at least 1,500 at start-up.

Toyota is the largest import brand in North America and its U.S. market share as of August had climbed to 10.47%, up from 10.1% a year earlier. Sales of sport utility vehicles, pickups and minivans have been responsible for much of the gain.

Globally, Toyota has said it intends to capture a 15% market share over the next decade, with much of the growth coming in North America.

"They have disclosed their ambition, and to achieve it they will need more manufacturing capacity," said Jim Hossack, an industry analyst with Tustin-based market consultant AutoPacific Inc.

Toyota has five North American plants, all operating at or near capacity, according to analysts at J.D. Power & Associates.

A sixth facility, a $220-million V-8 engine factory, is under construction in Huntsville, Ala. The Tijuana truck plants will bring the total to eight.

The Times reported in May that Toyota was considering a full-scale assembly plant in Mexico in addition to the Tijuana truck bed facility. Mexican government sources at the time said Japan's largest auto maker intended to spend more than $100 million on a new plant, which would add more than 1,000 jobs to the region's economy.

Automotive parts makers typically follow production plants, and Mexican authorities said they expected a dozen or so such firms to open in the area to serve Toyota.

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