Toyota moving Corolla production to Mexico from Ontario

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http://www.cbc.ca/news/business/toyota-moving-corolla-production-to-mexico-from-ontario-1.3033661
Ontario plant will still be used to build cars, but company hasn't specified which ones

Toyota will spend $1 billion on an assembly plant in Guanajuato, Mexico, and move production of its popular Corolla sedan there from another plant in Cambridge, Ont.

The Mexican 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 best-selling cars in the country and had been built here since the plant opened in the 1980s.

Toyota has made more than three million Corollas in Ontario since opening its first plant, but from now on, all Corollas sold in North America will either be built either in the Mexican plant, or an existing one in Mississippi.

New role for Cambridge plant

Toyota said Wednesday's news doesn't mean the end for the Cambridge plant, however. It will "switch from producing Corollas to mid-sized, higher-value vehicles," although a release Wednesday doesn't specify which ones.

The two plants currently produce Lexus models, the RAV4 sport-utility vehicle and the Matrix hatchback, in addition to the Corolla.

"We are thrilled to invest further in North America so we can better meet the needs of our customers for decades to come," said Jim Lentz, chief executive officer of Toyota's North American unit.

toyota-milestone-mississippi.jpg

A worker at Toyota's Mississippi plant. After Wednesday's move, the plant will be one of the two places where the company builds its popular Corolla sedan. (The Associated Press)

"Transforming our Canadian vehicle assembly plants is an equally important part of our strategic plan to position the North America region for sustainable long-term growth."

Toyota recently invested $100 million into the Cambridge-area facilities, which the company says added about 400 new jobs while introducing hybrid production and increasing capacity at the plants.

The Government of Ontario put a positive spin on the news, noting that Toyota has a long history in the province and there's no indication that Wednesday's news changes that.

"Toyota has been a great partner and contributor to Ontario's economy since first opening here almost 30 years ago, and since that time, they have invested almost $7 billion, creating thousands of jobs," Economic Development Minister Brad Duguid said.

"We have been assured that with today's announcement, Toyota will continue investing in the province, and ensure that Ontario plays a key role in Toyota's sustainable, long-term growth in North America."

The first Corollas from the 2020 model year will start rolling off the line in Mexico some time in 2019.

Separately, Toyota said Wednesday it will be adding a third production line to its existing plant in Guangzhou, China, at a cost of about $440 million. That line is to be completed by 2017, for a model the company declined to disclose.
Big T "strategerizing" now...does that mean for more Lexuses to be built in Canada?
 

CIF

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This is very interesting news. I take it then that either Toyota will be adding more Lexus production capacity to the Cambridge plant, or might be expanding production of Rav4 and Highlander models there. As I understand it, the Rav4 and Highlander are very production-limited right now, just as the NX is. So this would make sense then.
 

mmcartalk

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My first (and perhaps premature) reaction to this release was that it was just corporate double talk for simply going where labor is cheapest. But on closer look, that may not totally be the case, as it is somewhat unclear as just what will happen to the existing Corolla factory space in Ontario, and what it will be used for. So, I'll reserve judgement for now.
 
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corradoMR2

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This is very interesting news. I take it then that either Toyota will be adding more Lexus production capacity to the Cambridge plant, or might be expanding production of Rav4 and Highlander models there. As I understand it, the Rav4 and Highlander are very production-limited right now, just as the NX is. So this would make sense then.

My thoughts as well on NX and/or Highlander expansion or dare I say, the likely upcoming TX???? !!! :D

My first (and perhaps premature) reaction to this release was that it was just corporate double talk for simply going where labor is cheapest. But on closer look, that may not totally be the case, as it is somewhat unclear as just what will happen to the existing Corolla factory space in Ontario, and what it will be used for. So, I'll reserve judgement for now.

My initial reaction too...
 
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mikeavelli

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Mexico has quickly risen to be the 9th largest country in regards to vehicle production and I am sure will continue to climb...Audi, VW, Ford, everyone is making cars down there now...
 

corradoMR2

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Mexico has quickly risen to be the 9th largest country in regards to vehicle production and I am sure will continue to climb...Audi, VW, Ford, everyone is making cars down there now...

Despite my initial :eek: regarding quality expectations with manufacturing in Mexico, with Toyota's quality control and manufacturing standards/oversight, I'm not concerned, unless we have some hard facts showing Jettas built in Mexico have more issues than ones built in Germany for instance.
 
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Despite my initial :eek: regarding quality expectations with manufacturing in Mexico, with Toyota's quality control and manufacturing standards/oversight, I'm not concerned, unless we have some hard facts showing Jettas built in Mexico have more issues than ones built in Germany for instance.
I'm pretty sure that they will be watching extremely closely. I'm sure with any new ops, there will be some issues. Just ask Honda.

http://www.autonews.com/article/201...onda-like-problems-plague-new-plant-in-mexico
 

corradoMR2

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I'm pretty sure that they will be watching extremely closely. I'm sure with any new ops, there will be some issues. Just ask Honda.

http://www.autonews.com/article/201...onda-like-problems-plague-new-plant-in-mexico

Ouch, now I'm a little concerned... (Excerpt from the article)

The automaker's new $800 million plant in Celaya, about 160 miles northwest of Mexico City, has been struggling to meet demand amid problems caused by a green labor force, language barriers and a rail system prone to delays and occasional thefts, according to dealers who have discussed the matter with Honda officials.

Those challenges caused the plant's first product, the redesigned 2015 Fit subcompact -- which Honda was counting on to drive sales growth in the U.S. this year -- to stumble out of the gate two months late, with quality glitches and supply shortages showing up down the line.

The troubles with the Fit and the plant are "such a departure from what we normally see when Honda starts a new plant in the U.S. or Canada," said Ron Harbour, a partner at consulting firm Oliver Wyman and an expert on auto plant efficiency. "What's happened is really un-Honda-like," he said.
 

CIF

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Toyota has set so many production and quality standards over the decades. I'm a bit concerned, but also pretty confident Toyota will pull it off with VERY thorough worker training.
 

CIF

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A bit more from Toyota's full press release here:

http://pressroom.toyota.com/releases/toyota+manufacturing+billion+mexico+corolla.htm

So this is all related to Toyota's next-generation architecture. The press release gives some hints that Cambridge in the North line will build more higher-value vehicles similar to Kentucky and Indiana, which means mid-size sedans or crossovers, or possibly another Lexus model.

Also interesting that the Mexico plant will be the first Toyota plant in the world built from the ground up for their next-generation architecture.

Oh and I totally forgot, that in terms of concerns about quality and Mexico manufacturing, Toyota has been building Tacomas in Baja California, Mexico for a while now.
 

mmcartalk

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CIF said:
Also interesting that the Mexico plant will be the first Toyota plant in the world built from the ground up for their next-generation architecture.

Oh and I totally forgot, that in terms of concerns about quality and Mexico manufacturing, Toyota has been building Tacomas in Baja California, Mexico for a while now.

Toyota is not alone. Ford/ Mercury (until Mercury's demise), VW, and other manufacturers have produced vehicles there for decades.
 
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CIF

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Toyota is not alone. Ford/ Mercury (until Mercury's demise), VW, and other manufacturers have produced vehicles there for decades.

Yes, but Ford, VW, and almost all other manufacturers have had well-known quality problems with Mexican-built models. Toyota I believe is the only one that has been producing in Mexico for years without any serious quality issues. Of course I could be missing another competitor, but I can't think of any other automaker besides Toyota that has not had problems with quality relating to Mexican-built models.
 

mmcartalk

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Mercury, I remember, had their first and second generation compact Tracer (redone Mazda 323s...my late mother owned one) built at the Hermosillo, Mexico plant. According to Consumer Reports, they were reasonably reliable, though not as much so as the Japanese-built 323. From what I remember, third-generation Tracers (which were Ford Escort-based, rather than Mazda-based), were also built there, with varying reliability results (some good, some not-so-good). The old, traditional air-cooled VW Beetle was built in Mexico for decades, only ending production relatively recently...I can't speak to its reliability, since it was no longer sold in the U.S. after 1979. Yes, some other mexican-built VWs have definitely had reliability problems, but it seems unclear whether it because of the Mexican plant or just poor design.
 

CIF

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Mercury, I remember, had their first and second generation compact Tracer (redone Mazda 323s...my late mother owned one) built at the Hermosillo, Mexico plant. According to Consumer Reports, they were reasonably reliable, though not as much so as the Japanese-built 323. From what I remember, third-generation Tracers (which were Ford Escort-based, rather than Mazda-based), were also built there, with varying reliability results (some good, some not-so-good). The old, traditional air-cooled VW Beetle was built in Mexico for decades, only ending production relatively recently...I can't speak to its reliability, since it was no longer sold in the U.S. after 1979. Yes, some other mexican-built VWs have definitely had reliability problems, but it seems unclear whether it because of the Mexican plant or just poor design.

Ah you're right, I totally forgot about the old Beetle, and the Mercury Tracer. I guess those are a few exceptions for other automakers. Yeah in terms of modern VWs, sadly I don't think there are any models built in Mexico that are reliable. I agree with you though that it's likely a combination of regular VW reliability problems, combined with some Mexico plant quality issues. The Beetle makes sense, as it was such a simple and decades-proven design, it would have been actually quite hard even for the Mexican plant to mess up the quality of that one. I'm not too sure what the long-term reliability was on those Mexican Beetles, but I know overall those old Beetles tended to be fairly reliable.
 

mmcartalk

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One of the reasons we don't actually have the Honda HR-V yet is because of problems and theft at the Mexican plant. This article from C&D describes them:

http://blog.caranddriver.com/honda-...king-and-quality-issues-at-new-mexican-plant/

We like the Honda Fit, as it delivers a large amount of behind-the-wheel fun in a small, clever package, and we’d recommend it to just about anyone shopping for an affordable, practical runabout. Unfortunately, we would have to add the caveat that it might take a long time to get one: Automotive News is reporting that production of the Fit and its upcoming HR-V sibling are severely delayed.

Fit shipments are delayed by two months, the industry paper reports. And the HR-V will arrive at dealers in spring, instead of late 2014 as originally planned. These delays will cost Honda and its dealers dearly; they had hoped to benefit from the sales growth and buzz surrounding the launch of the two vehicles.

The cars are tardy because of massive problems at Honda’s $800-million production site in Celaya, Mexico. The brand-new plant is suffering from quality glitches and component-supply problems. Auto-production expert Ron Harbour, quoted by Automotive News, has said that it is tough to find skilled laborers. Moreover, even transporting parts in and cars out can be a problem, as “railcars do get hijacked” and completed vehicles have had parts stripped from them.

Finding a capable workforce won’t get any easier for Honda, as BMW, Audi, and Kia are in the process of building their very own production sites in Mexico right now. As they watch Honda struggle with its new facility, they might need to prepare for similar issues once their lines start churning out production.

As bad as things are in Mexico, they could perhaps be even worse. In a speech at the IZB supplier fair in Wolfsburg two years ago, Audi purchasing chief Bernd Martens cited Mexico as a positive example, contrasting it with what he characterized as the sorry state of the production and supplier landscape in Brazil.
 
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