Donald Trump has turned his Twitter ire on Toyota, telling the Japanese carmaker that it will face heavy penalties if it chooses to make cars for the US market in Mexico.
“Toyota Motor said 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,” the President-elect wrote on Twitter on Thursday.
The company responded that no US jobs would be lost as a result of its planned new plant, which is in the central state of Guanajuato, more than 1,700km away from its existing manufacturing facility in Baja, where it builds the Tacoma pick-up truck.
Toyota said it “looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry”.
Shares in Toyota fell more than 3 per cent in Tokyo on Friday morning and were down 2 per cent in midday trading.
Mr Trump’s intervention is his latest public broadside against a car company for making investments in Mexico, coming only days after he criticised General Motors, over the manufacture of its Chevy Cruze car.
But there is already evidence that the president-elect’s online outbursts are affecting investment decisions, with Ford, a long-time target of Mr Trump’s criticism, this week announcing that it would pull plans for a $1.6bn Mexican plant and instead invest $700m in its facility at Flat Rock, Michigan.
Mexico’s car industry, which has blossomed under the North American Free Trade Agreement to become the seventh largest car manufacturer in the world, is heavily dependent on exports to the US market.
Toyota’s American Depositary Receipts, which are traded on the US market, fell 0.6 per cent to $120.44 on Thursday.
In 2015, the company announced plans to spend $1bn building a new facility in Guanajuato that will make Corolla vehicles from 2019. The Corolla, a compact car, is the second-best selling car in the US, and Toyota currently manufactures it in Mississippi and Ontario, Canada.
In response to Mr Trump’s tweet, the company said: “Production volume or employment in the US will not decrease as a result of our new plant in Guanajuato, Mexico, announced in April 2015.”
Toyota has 14 plants in North America, 10 in the US, three in Canada and one in Mexico. In 2015, it built more than 2m vehicles in plants across North America, of which 1.3m were made in the US.
Only a fraction of its production is currently in Mexico, where the company’s Baja plant in 2015 turned out 82,328 Tacoma pick-up trucks. In September last year, the group announced that it would expand the capacity of this site by 60,000 vehicles by the end of 2017.
Speaking earlier on Thursday at an event in Japan, Akio Toyoda, Toyota president, said that the company would “see what policies the incoming president adopts” before deciding whether to take action.
He added: “Once we open a plant, we don’t want to shut it down for our own cause as much as possible. We want to be a good corporate citizen in every country that we are operating in.”
For its part, GM responded earlier this week to Mr Trump by pointing out that all of the saloon models of the Chevy Cruze are made in Lordstown, Ohio, while only the hatchback model is manufactured in Mexico.
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