Toyota’s CEO for North America, Jim Lentz, said the company is not having second thoughts about plans to build a new assembly plant in Guanajuato for Corolla small-car production, despite U.S. government threats of a 20% border tax on Mexican imports, according to Wards Auto.

The official explained that a change of plans is impossible in the near-term because of the complexity involved to rearrange the supply chain. The automaker would have to adjust its whole strategy to maximize efficiency at its regional assembly plants, Lentz told a small group of reporters at the National Automobile Dealers Association convention in New Orleans.

“The plan to move Corolla to Mexico is just one piece of a much larger puzzle (…) To take out one piece (of the plan) that is the Corolla and… do something different kind of destroys this strategic plan to move the rest,” Lentz said.

A 20% border adjustment tax would raise the cost of a U.S.-built Camry – the vehicle with the highest U.S. content at 75% – by about US$ 1,000 per unit, he cited as an example.

“If that’s the base level of what everything else goes up, that’s a pretty big hit to the consumer. Manufacturers don’t have the margins to absorb that”.

MexicoNow

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