Toyota Motor Corp announced it plans to build Tacoma pickups and possibly SUVs at the production plant currently under construction in the state of Guanajuato, Mexico. That facility was originally intended for production of Corolla sedans, which instead will be built at a new manufacturing plant the Japanese automaker plans to establish in a joint venture with Mazda.

The US$ 1.6 billion production site will be located in the “Southern part of the United States” but an official location is yet to be decided. Mazda plans to build SUVs at the same facility.

"We're going to concentrate only on pickups at the beginning and are studying the potential for SUVs in the future," Toyota de Mexico spokesman Luis Lozano said. Trucks and SUVs represent some 65% of the North American market, the official added in an interview to Mexican media.

The decision came as Toyota announced a “business and capital alliance” that implies the acquisition of a 5% share of the smaller rival Mazda Motor Corp., as part of a plan that also includes the compromise for joint development on electric vehicles.

A move to produce SUVs in Guanajuato would mark a continuation of a "burgeoning trend" of Mexican manufacturing meeting quality standards needed to produce more expensive vehicles, said Christopher Wilson of the Woodrow Wilson International Center to Reuters.

"Instead of building lower value cars that generally offer smaller margins in Mexico and keeping high-value SUV and luxury model production in the U.S., they are moving in the opposite direction," said Wilson, deputy director of the think tank's Mexico institute.

Lozano said he expected the company's level of investment and jobs in the region to remain similar despite the shift in plans.

MexicoNow

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