DETROIT – Toyota Motor Corp. will spend $10 billion in U.S. capital investments over the next five years, President Akio Toyoda announced Monday.
The automaker said the arrangement predates U.S. President-elect Donald Trump’s threat to penalize it for plans to produce cars for the American market in Mexico.
Toyoda made the announcement during a news conference at the North American International Auto Show in Detroit as the Japanese auto giant unveiled its redesigned 2018 Camry model.
“The Camry has been one of the reasons why we’ve invested $22 billion in the U.S. over the last 60 years and why we will invest another $10 billion here in just the next five years alone,” he said.
“We are deeply grateful for the millions of customers who made Camry the No. 1 best-selling car in America for the last 15 years,” Toyoda said.
The announcement came after Trump threatened Thursday to impose heavy taxes on Toyota if it goes ahead with plans to produce Corolla cars for the United States in Mexico.
“Toyota Motor said will build a new plant in … Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax,” Trump said in a post on Twitter.
Jim Lentz, Toyota’s North America chief executive, reportedly said Monday the automaker’s new U.S. investments were not in response to Trump’s remarks but were part of its business strategy.
The new Mexican plant will take over production of Corolla passenger cars from Ontario, Canada, which from 2019 will produce midsize, higher-value vehicles instead as Toyota realigns its North American production to reinforce its competitiveness.
In response to Trump’s tweet, Toyota said Thursday that neither production volume nor employment in the United States will decline because of its planned Mexican facility.
“With more than $21.9 billion direct investment in the U.S., 10 manufacturing facilities, 1,500 dealerships and 136,000 employees, Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry,” it added.
Since his election in November, Trump has been touting his “America First” economic agenda by pressing companies to keep jobs and production in the United States. He won such key industrial states as Ohio, Michigan and Pennsylvania with promises of protecting jobs.
On Tuesday, Finance Minister Taro Aso commented on Trump’s tweet as well. “I doubt whether the president-elect has an accurate grasp of how many cars Toyota makes in the United States,” he said in a news conference.
As for other carmakers, executives rushed to offer fresh evidence of U.S. investments at the auto show, amid pressure from Trump to repatriate manufacturing jobs.
Carlos Ghosn, chief of the Renault-Nissan alliance, offered a different take, saying moving back to the U.S. made business sense as a hedge against currency volatility.
“What we heard so far from the Trump administration is: America’s first, jobs in the U.S. What you’re hearing from us is: no foreign exchange risk,” Ghosn said. “I don’t think there’s going to be a lot of disruption.”
Meanwhile, Honda Motor Co. President Takahiro Hachigo said the same day his company does not plan to change its current investment strategy.
Fiat Chrysler Automobiles N.V. said Sunday it will increase its production capacity in the United States and add an additional 2,000 jobs.
Fiat Chrysler CEO Sergio Marchionne struck a conciliatory tone with Trump, who thanked the automaker in a tweet after its plans were announced.
“I appreciated the comment that he made today,” Marchionne said. “We haven’t forgotten how we got here. We owe a lot to this country.”
Ford piled on Monday with more news of expanded U.S. production, saying it will reintroduce the iconic Bronco sports utility vehicle and Ranger pickup truck. The vehicles will be built at a Michigan factory, displacing the production of Focus sedans, which will relocate to Mexico.
Ford Executive Chairman Bill Ford said while production decisions were based on business needs, he was having “frequent” conversations with the president-elect to keep him informed of what the company was doing.
“He’s very accessible, very easy to talk to,” Ford said.
He said discussions had covered “trade policies, currency fluctuations, tax policy, all the things that would affect our business.”
“I found him to be very informed and very respectful of our position.”
Representatives of the German car industry stressed that free trade agreements are economically advantageous. Members of the German automotive group VDA urged the president-elect to preserve trade liberalization.
“Cooperation and accessible markets, free trade and direct investments are two sides of the same coin, bringing prosperity and jobs to people on both sides of the Atlantic,” Matthias Wissmann, president of the group, said in Detroit.
Late Sunday, Volkswagen brand chief Herbert Diess said his company planned to keep manufacturing in Mexico. But he also emphasized that the German company could expand its capacity at its Chattanooga, Tennessee plant. VW also plans to build electric vehicles in the United States.
Volkswagen is still struggling to move past an emission-cheating scandal. Over the weekend, FBI agents arrested former VW executive Oliver Schmidt, who faces charges that he knowingly lied to U.S. regulators.
Swedish automaker Volvo also signaled it plans more investment in the U.S. market. Volvo, whose biggest shareholder is Chinese, plans to begin production on a second generation S60 midsize sedan in 2018, Volvo CEO Hakan Samuelsson said.
Production from that factory largely will be of cars that can be exported. Half the German cars produced in the U.S. are exported, with about a quarter going to Europe and a quarter to Asia, according to the VDA.
“We assume that the new administration will aim to strengthen U.S. industry,” Wissmann said.