Toyota revives Brazil, US plant projects
Tokyo, June 17, 2010
Toyota Motor Corp is set to resume construction of car assembly plants in Brazil and Mississippi which were put on hold amid the global financial crisis, the Nikkei business daily said on Thursday.
A Toyota spokeswoman said, however, that the world's largest automaker has not made any decision to revive the projects.
The stock market reaction was muted, with an analyst saying the possibility of the construction resumptions had already been factored in following a recent recovery in car sales.
Toyota, which undertook a massive recall of vehicles globally earlier this year amid growing doubts about the quality of its safety systems, forecast in May its global sales would increase 0.7 per cent to 7.3 million units in the year to March 2011.
"The resumption of the plant projects is not a surprise at all. It is only natural, given the steady expansion of the global economy and the favourable impact of scrap incentives in various markets," said Aizawa Securities analyst Toshiro Yoshinaga.
Shares of Toyota shed 1.4 per cent to 3,285 yen ($35.97), underperforming the Nikkei stock average which slipped 0.4 per cent.
The Brazil plant, which would be Toyota's second in the country, would produce small vehicles for the local market, with an annual output capacity of just over 100,000 units. Operations may start next year, the Nikkei said.
Plans for the plant were put together in the summer of 2008, but the project was frozen as auto sales fell, the Nikkei said.
In the first four months of this year, Brazil overtook Germany to become the world's fourth-largest car market after China, the US and Japan, the paper said.
Toyota also plans to bring a factory in Mississippi onstream, possibly in mid-2011, the Nikkei said. Originally slated to start operations this year, the facility would produce about 100,000 Corolla sedans a year, the paper said. – Reuters