Wednesday, April 15, 2015
Toyota Announces Corolla Exodus from Cambridge to Mexico for 2019
This year marks the 50th year that Toyota has operated in the Canadian marketplace. In the decades that followed the introduction of the Crown and Land Cruiser, the auto brand's line-up has become a common sight on Canadian roads. Since 1988, the Toyota corporate entity has been greatly integrated with Canada when they commenced production in Cambridge, Ontario of their popular Corolla. Today, it has been announced a new direction for their North American manufacturing that involves removing production of the Corolla from Canada by 2019.
Described corporately as a realignment of North American manufacturing, Toyota's movement of vehicle production will send production of the Corolla to a plant in Mexico. Part of a billion-dollar investment the Mexican state of Guanajuato, Toyota's commitment for producing the Corolla in the country follows a late-2012 decision to co-produce the Canada's Yaris and the United State's iA in Mexico on a platform shared with the Mazda's subcompact car, the Mazda2. The temptation of lower labour costs has led to many auto companies seeking to increase their profit margin in the country south of the United States.
The Toyota Corolla is currently produced in the North Plant facility part of the company's Cambridge manufacturing operations. While there will be not Corolla production after 2018 (concluding after what will be 30 years built in Canada), Toyota has no plans to completely forsake their Canadian workforce; in fact, the automaker has new plans for the Cambridge plant. Starting in 2019, the Cambridge plant will be focused in the production of a mid-sized high-value vehicle. The question is, for whom will these future vehicles be presenting a higher value?
Higher value likely means more expensive Toyota products from the Lexus line. Featuring similar engineering and technology as the Toyota brand vehicles, cars and crossovers of Lexus can sell for thousands more based greatly on the nameplate. In recent years, Toyota Motor Corporation has drawn production of some Lexus vehicles out its traditional base in Japan. In 2003, the RX premium crossover utility was first built in Cambridge's South Plant (the first time a Lexus product was assembled outside of Japan). Crossover vehicles have also been favoured for automotive production in Canada for the 21st century. In the past two years, production of the Ford Edge and the Chevrolet Equinox has been re-upped inside the province of Ontario.
Toyota's operations at the South Cambridge plant and the facility in Woodstock will continue as usual. South Cambridge currently devoted to the Lexus RX 350 and RX 450h while the Woodstock plant is building the popular Toyota RAV4.
Though Toyota has reaffirmed their commitment to producing vehicles in Canada, the automaker's decision is the second time in less than a year Canadian vehicle production appears directly affected by the emerging threat Mexico is in luring auto manufacturing. In October, Ford chose to invest $2-billion in Mexico as opposed to their Windsor Assembly Plant.