Toyota lost its crown as the world’s top-selling automaker in 2016, company figures showed Monday, with the Japanese giant overtaken by Volkswagen as the industry prepares for an uncertain trade environment under Donald Trump. Ford’s decision also puts the brakes on Detroit automakers’ push to build small cars in Mexico to reduce labour costs while using higher-paid US workers for larger, more expensive vehicles. The threat about the Japanese automaker’s planned new plant in Mexico is just the latest from Trump, who already has gone after two other automakers.
The automaker also intimated its plan to sell or close all of them by the end of 2008, but the company said Thursday one or two plants may remain open a while longer to ensure a continuous production flow. A longtime Big Three economist on why the automaker crisis would be funny if it weren’t so tragic.
After Trump’s online criticism, Toyota released a statement saying the new Mexico plant will not take jobs from the U.S. and stressed its contribution to the country. In an editorial, the China Daily urged Trump to recognize the importance of close economic ties between China and the United States.
GM said in 2014 it would invest $5 billion in Mexico through 2018, a move that would allow it to double its production capacity, and Barra has said the automaker is not reconsidering the plan. Kristin Dziczek, an analyst at the Michigan-based Center for Automotive Research, said automakers still had excess capacity in North America after suffering in the 1990s and 2000s from overcapacity and shifts in market share.
If they give into Trump and start building new factories and hiring new workers in a peaked market, the capital will be wasted because the capacity will never be needed and the jobs will be perilous because they’ll vanish in a downturn. French automaker Peugeot S.A. is set to start local assembly of its brands later this year in a venture that is being spearheaded by its local partner Urysia.