Toyota to move Corolla assembly out of Canada, refocus Ontario plants

A Toyota Motor Corp.'s model is on display at the automaker's head office in Tokyo on May 8, 2013. (Itsuo Inouye/AP)

Toyota will stop producing the Corolla in Canada within a few years but says it will continue to invest in its plants in Ontario as part of a shift in its global manufacturing operations.

Toyota Motor Corp. announced Wednesday it will invest US$1 billion in the plant in Guanajuato, Mexico, creating 2,000 jobs, to make the Corolla subcompact -- one of Toyota's biggest sellers.

Production of the Corolla in Cambridge, Ont., will end but Toyota says it will continue to make other vehicles in that city and in Woodstock, Ont.

Separately, Toyota is adding a third assembly line next to its plant in Guangzhou, China, investing 52.5 billion yen ($440 million). The line is to be completed by 2017, for a model it declined to disclose.

Toyota currently makes Lexus crossover vehicles, the RAV4 sport-utility vehicle as well as the Corolla in Ontario for the Canadian market and for export, mostly to the United States. Toyota Canada also made the Matrix hatchback until last June.

The company didn't announce what vehicles will be made in Canada or how much it will spend on its Ontario plants.

Production at the Mexican and Chinese plants is to start in 2019, with annual output estimated at 200,000 vehicles. That will consolidate Corolla production for North America in that plant and Toyota's plant in Blue Springs, Miss.

Annual production capacity will go up by 100,000 vehicles. The new line won't create new jobs because the existing two lines will become more efficient, reducing the number of workers needed, according to Toyota.

A Toyota executive, briefing reporters in Tokyo over a video connection from Nagoya in central Japan, said Mexico and China were chosen because they are two markets where auto demand is expected to rise in coming years.

Toyota has been working on a strategy for growth called Toyota New Global Architecture, or TNGA, based on a more widespread sharing among models of platforms, or the basic parts on which cars are built, as well as other components.

The "architecture" is based on a leaner, smarter approach to production, to become as competitive and as fail-proof as possible in quality. The first cars under the system are to roll out later this year.

Acknowledging the company had grown too fast, Toyota President Akio Toyoda put on hold for the past three years any plans for new plants after the recall fiasco which began in 2009.

More than 10 million Toyota vehicles were recalled around the world for faulty brakes, sticky gas pedals, ill-fitting floor mats and a range of other defects.

Toyota is still embroiled, along with other automakers, in a recall involving air bags made by Takata Corp. of Japan which can deploy and rupture with enough force to cause injury or death.

It has been eager to put the recall woes behind it, but Toyoda has repeatedly stressed future growth must be "sustainable" and ensure quality.

"An increase in production does not mean an undisciplined pursuit of more," he said in a statement Wednesday.

--With files from The Associated Press