Toyota raises U.S. investment by $3bn as tariffs loom

NAGOYA, Japan — Toyota Motor plans to invest nearly $13 billion in the U.S. over the five years through 2021, $3 billion more than previously pledged, as it boosts production there in a nod to President Donald Trump’s push to boost American manufacturing.

The Japanese automaker is investing $750 million into facilities across five U.S. states as part of the plan  in a bid to produce more components and hybrid vehicles in the U. to avoid tariffs of up to 25% under the revised North American Free Trade Agreement.

The new trade rules in USMCA, expected to take effect as early as next year, require a car or truck sold in North America to have 75% of its content procured from within the region — the U.S., Canada and Mexico — in order to be exempt from tariffs. Toyota wants to boost production in the U.S. to keep its vehicles competitive in one of the world’s biggest auto markets.

“These investments represent even more examples of our long-term commitment to build where we sell,” said Jim Lentz, CEO of Toyota’s North America unit.

“Congratulations Toyota! BIG NEWS for U.S. Auto Workers!,” Trump tweeted on Thursday.

The move is also part of a greater shift toward producing in the U.S. for that market. In 1980, Toyota shipped 99% of all vehicles sold in the U.S. from Japan, then 66% in 1990 and 28% in 2018.

Source:

https://asia.nikkei.com/Business/Companies/Toyota-raises-US-investment-by-3bn-as-tariffs-loom

 

 

 

 

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