Toyota to put $10 billion into U.S. over 5 years

Toyota, Toyota Dealership, Graphics Project

(c) 2015, Japan News/Yomiuri

DETROIT – Toyota Motor Corp. will invest $10 billion (about 1.17 trillion yen) in the United States over the next five years, its President Akio Toyoda announced at a Detroit auto show on Monday.

The announcement came days after U.S. President-elect Donald Trump criticized Toyota’s plan to build a new factory in Mexico and expressed his intention to impose a de facto heavy tariff on the automaker if production is not carried out in the United States. Toyota apparently aims to fend off such criticism by stressing its contribution to the U.S. economy with a hefty investment.

An executive of Toyota’s U.S. unit told reporters that the company would not cancel the plan to build the plant in Mexico.

- FWBP Digital Partners -

The Toyota president made the announcement of the $10 billion investment in a speech at the North American International Auto Show.

Referring to the company’s total amount of investment in the United States over the past 60 years, which is about $22 billion (about 2.57 trillion yen), Toyoda stressed the company’s plan to increase the pace and scale of investment in the country. He also said Toyota has helped the U.S. economy by creating about 136,000 jobs in the country.

However, he did not elaborate on the planned investment of more than 1 trillion yen.

The automaker on Monday also unveiled a plan to introduce a new design and production method for its major new model of Camry sedan. Part of the investment is likely to be used for the model. Toyota is also conducting research and development on artificial intelligence for self-driving technology in California and other locations while a new headquarters is being constructed in Plano to consolidate U.S. operations. The large investment appears to fund these existing plans as well.

- Advertisement -

In the wake of Trump’s growing criticism of moving U.S. manufacturing jobs abroad, automakers have rushed to announce investment plans in the United States.

On Sunday, Italian-American automaker Fiat Chrysler Automobiles (FCA) announced a plan to invest about $1 billion in two U.S. plants through 2020. U.S. automaker Ford Motor Co. scrapped a plan to build a new factory in Mexico and then announced a plan to boost the production capacity at its Michigan plant.

Trump praised FCA and Ford for the investment plans, saying, “Thank you” in a tweet on Monday.

Ford Chief Executive Officer Mark Fields told reporters in Detroit on Monday he hopes the Trump administration will set out policies friendly to the U.S. manufacturing sector.

- Advertisement -

Meanwhile, General Motors Co. CEO Mary Barra said on the same day that GM has no plans to shift small-car production to the United States from Mexico as the decisions on production were made four years ago with high capital-intensive investments.