Brazil's Auto Policy Sparks Toyota Expansion

08/08/96

Kyodo reported that Toyota Motor Corporation will build a new plant to make Corolla subcompact cars in the state of Sao Paulo, Brazil. Toyota's announcement came amid Japanese protests to the World Trade Organization about Brazil's high-tariff automotive import policy.

Toyota will start constructing the plant this year. It will cost them $150 million, and they hope to manufacture 15,000 vehicles a year in it. The plant will be located in Indaiatubo, 120 km northwest of Sao Paulo. The first vehicle should roll off the line by the end of 1998.

Once the plant is operating, Toyota will benefit from Brazil's auto policy which allows companies with a manufacturing base in Brazil to import vehicles under a 35% tariff. Companies without a Brazilian base must pay a 70% tariff to export vehicles to Brazil. Japan has criticized the policy as an unfair trade practice.

The new plant will be Toyota's second in Brazil; the company has manufactured pickup trucks and station wagons in the Sao Paulo area since 1958.

Paul Dever -- The Auto Channel