Shares of Toyota Motor Corp fell more than 3% on Friday after US president-elect Donald Trump threatened to impose heavy taxes on the carmaker if it builds its Corolla cars for the American market at a plant in Mexico.
Toyota dropped as much as 3.1% to 6,830 yen ($59.06) in early trade before paring losses, after Trumps tweet on Thursday – “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for US NO WAY! Build plant in US or pay big border tax.”
The tweet was Trump’s first broadside against a foreign carmaker. He has slammed automakers in the United States for building cars in lower-cost factories south of the border, which he said costs American jobs.
This week Ford Motor Co scrapped plans to build a US$1.6 billion assembly plant in Mexico after Trump criticized the investment.
Trump’s tweet confused Toyota’s existing Baja plant with the planned US$1 billion plant in Guanajuato, where construction got under way in November.
Baja produces around 100,000 pickup trucks and truck beds annually, including the Tacoma pick-up truck. In September, Toyota said it would increase output of pick-up trucks by more than 60,000 units annually.
The Guanajuato plant will build Corollas and have an annual capacity of 200,000 when it comes online in 2019, shifting production of the small car from Canada.
Other Japanese automakers have plants in Mexico. Nissan Motor Co has two facilities, producing 830,000 units in the year to March.
Honda Motor Co operates two assembly and engine plants in Mexico with a total annual capacity of 263,000 vehicles. It also operates a transmission plant with an annual capacity of 350,000 units.
Other Japanese carmakers also fell in early trade, with a stronger yen dragging on prices too. Honda fell more than 2% before paring losses, while Nissan also shed 2%, underperforming the broad Topix index.