Toyota ready to defend Mexico beachhead

MEXICO CITY — The streets of this sprawling, 20-million-person metropolis long have been filled with Nissan taxis, Volkswagen commuter cars and Chevrolet Suburbans packed with VIPs and their surly bodyguards.

But Toyotas? Not so much. Maybe an occasional Camry or a Sienna minivan in the more middle-class neighborhoods of the capital and its suburbs.

Nowadays, though, Toyota Prius sightings are commonplace. It's exempt from government regulations that curb autos during smog alerts, gets great mileage in a nation that just ended gasoline subsidies and has space-age looks.

So far this year, the Prius is easily outselling all comers in the "luxury" car segment, which, in a developing nation such as Mexico, includes the Honda Accord, Toyota Camry and VW Passat.

The sudden visibility of the Prius is symbolic of Toyota's larger ambitions in Mexico. It is now the No. 4 brand by market share after years as a minor player, and it is more than doubling its modest manufacturing footprint.

"It truly has been a great year in terms of sales and has also been a great year for us in terms of manufacturing," Luis Lozano, director of government and industry affairs for Toyota de Mexico, told Automotive News last month. "We are in full growth mode in pickups, and that reflects Toyota's interest in Mexico."

Toyota's sole Mexican plant, near Tijuana, is in the final phase of expanding output of the Tacoma pickup to 160,000 vehicles per year from 100,000, said Mike Bafan, president of Toyota de Mexico, who oversees manufacturing.

Toyota's second assembly plant in the country is under construction in the central state of Guanajuato. It was slated to make the Corolla, but that changed in August, when the company said it will make the compact sedan at a new U.S. plant with Mazda and refocus Guanajuato to make even more Tacomas in late 2019 or early 2020.

"One of the things we've continued to do is navigate through a very dynamic market lately, and demand for trucks and SUVs is on the rise on both sides of the border," Bafan said.

Toyota came relatively late to Mexico, setting up shop 15 years ago. The roots of the Detroit 3, VW and Nissan go back at least half a century.

But Toyota's timing has been good. Auto sales in Mexico have doubled over the last six years to a record 1.6 million in 2016. And Mexico is a critical partner in the North America auto industry.

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