Honda & Toyota to continue making cars in Mexico, for now

January 05, 2017 – After Ford and General Motors, two other carmakers are in the news today. Both Honda and Toyota announced today that they currently have no plans to stop production of automobiles in Mexico. Yesterday, Ford Motors announced the cancellation of their plan to build a new manufacturing plant in Mexico. This revelation came as Trump inauguration is almost upon us. He has spoken several times about how he disapproves Ford’s plan to build a plant in Mexico instead of building it in USA. He chided Ford for taking away jobs from United States of America; he wants carmakers to produce cars in USA if they plan to sell them here or prepare to pay big border-tax. Trump is going to be a pro-business President, there is no doubt about that, and he is going to take actions, like the border-tax, to make business industry prosper in USA. Will this tactic work? Only time will tell…

Today, presidents of both these motor industry giants clarified their stance on this matter. Both these companies are among the top five motor selling companies in the United States of America. Honda, founded in 1946, has its headquarters in Tokyo, Japan. It has more than 200,000 employees working in factories, showrooms, service-centers, and research centers. With a revenue of more than $130 billion, Honda is one of biggest companies in Japan. Toyota is even bigger; their workforce is >300,000. Their total annual revenue is >$250 billion!

Trump has chided automakers over production of vehicles in other countries including Mexico and Canada. Trump’s motto is to encourage or maybe force automakers to start building new plants in USA, so that they can produce vehicles here instead of in Mexico or Canada; something that will create new jobs in USA. Toyota’s President Akio Toyoda said in a brief statement that his company is going to wait for Trump to take the office. He basically is waiting to see if Trump really will adopt strong policies like imposing high border-taxes.

It is worth noting that just like Ford, Toyota has plans of building a new manufacturing plant in Mexico. The future of this plan hinges on the policy that Trump administration will adopt. USA has a Free Trade Agreement with Canada and Mexico; Trump has said that he might change the terms and conditions of this agreement; if he really does that, it would have a large impact on trading between US and other countries. Toyota and Honda are earning a huge sum of money from USA’s motor industry; when push comes to shove, I believe these two companies will bow down just as Ford did.

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