Trump attacks Toyota for expanding in Mexico to sell in U.S.
President-elect Donald Trump set his sights Thursday on Toyota, attacking the Japanese automaker for expanding in Mexico to sell more vehicles to Americans, as he builds support for his proposed tariff on vehicles imported to the U.S.
The attack heightens tension between Trump and the auto industry over vehicles that are made in foreign markets for sale to American consumers.
"NO WAY!" Trump said in a tweet about Toyota. "Build plant in U.S. or pay big border tax."
Trump has proposed renegotiating the North American Free Trade Agreement to punish companies that manufacture vehicles in Mexico and sell them in the U.S. with a 35% tariff. Toyota joins General Motors and Ford Motor as targets of Trump's attacks on the auto industry. On Tuesday he criticized GM for selling a made-in-Mexico version of the Chevrolet Cruze in the U.S.
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Shares of Toyota, which is based in Japan, that are traded in New York dipped 0.5% to $120.54 after the Trump tweet.
Over the decades, Toyota has developed a massive footprint of plants in the U.S. It includes factories in Kentucky, Alabama, West Virginia, Texas and Indiana, from which it exports more than 160,000 vehicles annually to 40 countries.
Toyota said Thursday in a statement that it "has been part of the cultural fabric in the U.S. for nearly 60 years. The company said it would not slash U.S. production volume or jobs as a result of its under-construction $1 billion Corolla production plant in the state of Guanajuato in Central Mexico.
The new Mexico plant will employ about 2,000 workers and make 200,000 vehicles annually.
"Toyota looks forward to collaborating with the Trump Administration to serve in the best interests of consumers and the automotive industry," the company said.
Several major automakers have shifted production of low-profit-margin small cars to Mexico in recent years, even as they've expanded U.S. production of bigger, more profitable vehicles. Mexico produced 3.4 million vehicles in 2015, according to the International Trade Administration.
Reversing the flow of manufacturing jobs to Mexico may prove politically infeasible. The Center for Automotive Research projected that U.S. share of North American automotive production would fall from an all-time low 63% in 2016 to 58% in 2020.
During his presidential campaign, he repeatedly slammed Ford Motor for expanding in Mexico. Ford won the president-elect's praise Tuesday when it announced plans to cancel a planned $1.6 billion factory in Mexico and expand a Michigan plant.
Ford will still move production of the Focus sedan to Mexico, albeit to an existing plant, instead of a new facility.
In his tweet Thursday, Trump incorrectly said Toyota would "build a new plant in Baja, Mexico, to build Corolla cars for U.S." The location of the Corolla plant is Guanajuato in central, not Baja, Mexico. Production of the Corolla is expected to move from an Ontario, Canada, facility to the Corolla plant in Guanajuato, after which the Ontario factory will retool for larger, more expensive vehicles.
But Toyota is expanding in Baja, too. Toyota U.S. sales chief Bill Fay confirmed on Wednesday that the company is expanding its existing plant in Baja to add annual production capacity of 60,000 Tacoma midsize pickup trucks for sale in the U.S. Production may start as soon as late 2017. The Tacoma is a hot seller in the U.S., even outselling the vaunted Prius hybrid in 2016.
"I’m a little excited to be able to get my hands on those Tacomas with my dealers," Fay told reporters Wednesday.
Asked about Trump's proposed border tax, Fay told reporters on Wednesday that the company is "watching this very closely."
"I think our goal is to work with the new administration and Congress" to develop fair trade policies, Fay said.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.