Toyota opens its third plant in Brazil

AFP-JIJI

Toyota Motor Corp. has inaugurated a ¥47 billion plant in Brazil’s southeastern state of Sao Paulo, its third in the country, with an initial production capacity of 70,000 vehicles a year.

The facility in Sorocaba, about 90 km west of the city of Sao Paulo, will begin turning out Etios compacts in September, with engines imported from Japan, according to Toyota.

Those present at the inauguration ceremony Thursday in the sprawling new complex included Toyota President Akio Toyoda, Brazil’s industry and foreign trade minister, Fernando Pimentel, Sao Paulo Gov. Geraldo Alckmin and Japanese Ambassador to Brazil Akira Miwa.

Toyoda described the four-door Etios, which will be produced in hatchback and sedan models, as “a car made by Brazilians for Brazilians.”

Pimentel said the Sorocaba plant, billed as environmentally friendly and with a workforce of 1,500, amounted to a vote of confidence by the world’s leading automaker “in the strength of the Brazilian economy and its auto market.”

Brazil is the world’s fourth-largest market for carmakers after the United States, China and Japan.

Toyota Mercosur President Shunichi Nakanishi said the company plans to double its sales in Brazil to around 200,000 vehicles over the next two years and become one of the local market leaders within a decade.

The company held a roughly 3 percent share of the Brazilian auto market last year, well behind leading players Fiat SpA, Volkswagen AG and General Motors Co.

Toyota opened shop in Brazil in 1958, and operates two other plants in Sao Paulo state — in Sao Bernardo do Campo, where it is headquartered, and Indaituba.

Following talks Wednesday with President Dilma Rousseff in Brasilia, Toyoda announced that the automaker also intends to invest nearly ¥40 billion to build an engine plant in Porto Feliz, around 30 km from Sorocaba.

That facility will be ready in 2015, and its envisioned 600 employees will churn out around 200,000 engines for Etios and Corolla vehicles. The Porto Feliz engine plant will eventually enable Toyota to produce the two models with 85 percent local content — thereby avoiding a 30 percent import tax.

Last April, Brazilian authorities introduced a new directive known as Inovar Auto to spur innovation by forcing automakers to invest in vehicle and component research and development. The move triggered a flood of inward investment in the country’s auto market by companies looking to avoid the import tax.

Toyota said the new investments are aimed at boosting local production “now that the Brazilian auto market is showing signs of consistent growth.”