Toyota Motor Corp (ADR) (NYSE:TM) To Spend $1.4 Billion On First Plants Since 2013

Toyota Motor Corp (ADR) (NYSE:TM) plans on spending close to $1.4 billion to construct new assembly lines in Mexico and China. The move will end the long pause that the company had put on itself for the building of new vehicle factories since the financial crisis.

The giant automotive manufacturing company plans on revealing a new model in 2017, which will initially be produced in China. The Mexican factory will be constructed soon and will start making Corolla vehicles by 2019.

Akio Toyoda, President of the mega company, made a statement that the company was not aimlessly pursuing more production capacity. He further went on to add that the company’s new venture will be important in testing the company’s resolve as well as measuring the level of improvement.

Toyota’s resolution to go back to building new production plants came after the company continued to experience excessive demand. The company had imposed a ban on the building of new production lines in 2009 following the financial crisis. It was around that time that the company experienced its first loss since the 1950’s. Currently, the performance is in top gear despite facing a lot of competition especially from Volkswagen AG.

Toyoda said that more production is particularly required in North America. He further went on to report that the current production plants were working at almost full capacity, with little room left for improvement.

The company is expected to spend $439 million to boost the Chinese annual production by at least 100,000 automobiles. The company claimed that the injection will not require hiring new employees. The alternative chosen was a joint venture with Guangzhou Automobile Group Co. in restructuring two assembly plants while building a new one right next to an existing facility.

The proposed Mexican plant is expected to create more capacity for the company. The venture capital required to put up the assembly plant is well over $1 billion. About 2000 new jobs will be created.

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Published by Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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