Japan describes Toyota an “important corporate citizen”
The Japanese government has defended Toyota Motor Corporation as an “important corporate citizen” of the United States, after President-elect Donald Trump singled out the automaker and threatened to slap punitive tariffs on its Mexico-built cars.
Trump has repeatedly hit out at U.S. companies for using lower-cost factories abroad at the expense of jobs at home. He has slammed U.S. automakers, including Ford which this week scrapped a planned $1.6 billion Mexico plant.
The attack overnight on Toyota is his first against a foreign automaker. “Toyota Motor said it 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,” Trump had tweeted and threatened a 35 percent tariff on cars imported from Mexico.
Toyota shares fell more than 3 percent before recovering, and Honda Motor Co (7267.T) and Nissan Motor Co (7201.T) slid around 2 percent even as the government and analysts sought to brush off the impact of the attack.
Chief Cabinet Secretary Yoshihide Suga had stated told reporters that Toyota was an “important corporate citizen”, while Trade Minister Hiroshige Seko stressed the contribution of Japanese companies to U.S. employment.
Toyota is just one of a host of companies operating in Mexico with an assembly plant in Baja California, where it produces the Tacoma pick-up truck, and where it could increase production.
Trump’s tweet, however, confused Toyota’s existing Baja plant with the planned $1 billion plant in Guanajuato, where construction got under way in November, and days after the election. Baja produces around 100,000 pick-up trucks and truck beds annually. Toyota said in September it would increase output of pick-up trucks by more than 60,000 units annually.
The Guanajuato plant will build Corollas and have an annual capacity of 200,000 when it comes online in 2019, shifting production of the small car from Canada.
Other Japanese automakers and suppliers in Mexico include Nissan, which has been in Mexico for decades after choosing it as the site for its first assembly plant outside Asia. Nissan has two facilities there, producing 830,000 units in the year to March 2016.
Honda operates two assembly and engine plants with a total annual capacity of 263,000 vehicles, and a transmission plant with an annual capacity of 350,000 units.
MIKE OCHONMA