A newly assembled Toyota Tacoma pickup truck undergoes final inspection on the assembly line at the company’s manufacturing facility in San Antonio in 2016. Tacoma Assembly will now return to the facility. (Luke Sherratt/Bloomberg)
key takeaways:
- Toyota said on July 6 that it would move some Tacoma production from Mexico to San Antonio as part of a $3.6 billion Texas investment.
- Toyota said the expansion would add about 2,000 jobs by 2030 and increase San Antonio’s annual capacity to 150,000 vehicles.
- Toyota said its central Mexico Tacoma plant will continue U.S. exports, while the Tijuana factory’s replacement product is unclear.
Toyota Motor Corp. is shifting some production of its popular Tacoma midsize truck from a plant in Mexico to San Antonio as part of a $3.6 billion investment in the Texas facility.
The Japanese carmaker will build a second production line in San Antonio, where it currently makes full-size pickups and SUVs, and add about 2,000 new jobs by 2030, it said on July 6.
The change comes as talks between the U.S. and Mexico to renew the North American Free Trade Agreement remain stalled, following Toyota’s pledge last year to spend $10 billion on its U.S. manufacturing operations over the next decade. President Donald Trump, who has pressured Toyota to invest more in the US, let the July 1 deadline pass without extending the trade deal.
The world’s largest automaker is on track to overtake General Motors Co. in new car sales volume in the U.S. later this year.
“By expanding our San Antonio plant, we are deepening our commitment to American manufacturing,” Ted Ogawa, president of Toyota Motor North America, said in a statement.
Connected: Toyota to invest additional $1 billion to expand production at US plants
The Tacoma, or “Taco” to truck lovers, is the best-selling midsize pickup in the US and is built in two plants in Mexico. It’s unclear which product will make up for lost production at the factory near Tijuana, which made about 166,653 Tacoma models last year. A company spokesperson said Toyota had nothing further to share at this time.
The second plant making Tacomas, located in central Mexico, will continue to export them to the U.S., the spokesman said.
By shifting some production of its best-selling trucks to Texas, Toyota will protect itself from the impact of tariffs on Mexican imports. Autos shipped from Mexico face U.S. tariffs of up to 25%, which has hit the bottom line of Toyota and other automakers and upended decades of cross-border production planning.
The expansion in San Antonio, which is nearly twice as large as anticipated, will double the size of the plant to about 5 million square feet. And it would bring Toyota’s total spending at the site since it opened there 23 years ago to $8.3 billion.
“This Texas-sized investment reflects the strength of our workforce and the unmatched business benefits only found in our state,” Governor Greg Abbott said in the statement.
San Antonio is currently running near its full production capacity of about 200,000 vehicles per year, the spokesperson said, and the expansion will add another 150,000 vehicles annually. Additional production will increase over a four-year period from 2030.
Toyota’s pledge to increase spending was designed to blunt Trump’s criticism and was followed by a trade deal between the US and Japan. So far, those investments include a $1 billion investment to increase production at plants in Indiana and Kentucky, as well as a $912 million investment to increase production at facilities in five other U.S. states.
