Borderlands is a weekly overview of developments in the world of cross-border freight transport and cross-border trade between the United States and Mexico. This week: Toyota pumps $1.45 billion into Mexico to boost production in Tacoma; Union Pacific to Serve Volkswagen Hub at Texas Seaport; South Korean Freight Carrier Opens Subsidiary in Mexico; and Nefab is expanding in Arizona with storage and logistics facilities.
Japanese automaker Toyota plans to strengthen its manufacturing presence in Mexico with a $1.45 billion investment.
The financing will increase Toyota’s production capacity in the country by expanding factories in the cities of Apaseo el Grande and Tijuana.
The investments will go towards the production of Toyota’s latest generation of Tacoma pickup trucks, as well as the production of a new line of Tacoma hybrid electric vehicles.
“[Toyota] is one of the companies we work with most closely and it has a great future in our country,” Mexican Economy Minister Marcelo Ebrard said in a video posted on November 8 announcing Toyota’s investment. “The administration of President Claudia Sheinbaum is committed to providing security and confidence to investors and promoting development with well-being in the country through investments. We will continue to work because she asked us to attract more investments and create quality jobs.”
Toyota’s plant in Apaseo el Grande will receive $1.1 billion in investments and add 450 jobs. The plant currently employs 1,700 workers and produces approximately 100,000 Tacoma pickup trucks annually, which are exported to the United States.
Located in the central Mexican state of Guanajuato, Apaseo el Grande is an important automotive manufacturing center.
In Tijuana, Toyota is investing $336 million to expand production in Tacoma, creating 1,200 jobs. The plant employs 2,000 workers and produces approximately 130,000 Tacomas annually for the U.S. market.
Tijuana is across the border from San Diego.
“At Toyota, we believe in Mexico and the relevance that investments have for the country’s economic, environmental and social development,” said Luis Lozano, president of Toyota Mexico, in a press release. “With this announcement, Toyota has made an investment of more than $3 billion in Mexico, a country critical to North America’s regional competitiveness.”
Toyota’s expansion in Mexico comes as newly elected President Donald Trump has floated the idea of adding tariffs of 10% to 25% on all imports from Mexico.
Ebrard said if Trump follows through, Mexico could impose tariffs on U.S. goods flowing south of the border.
“If you impose 25% tariffs on me, I have to respond with tariffs,” Ebrard told broadcaster Radio Formula on Monday. “Structurally, we have the conditions to play in Mexico’s favor.”
Union Pacific Corp. (UP) said it is the preferred rail partner for Volkswagen Group of America’s recently opened logistics hub in Port Freeport, Texas.
UP officials said they will help Volkswagen distribute imported vehicles to about 300 dealers in the central and western U.S.
“This is an important milestone for Union Pacific and Volkswagen as we continue our long-standing partnership,” UP Director of Marketing and Sales Andrew Dziuda said in a press release.
Volkswagen’s new hub in Port Freeport opened in October. The 120-acre facility has 53 rail car spaces. It has the capacity to process up to 140,000 Volkswagen, Audi, Bentley, Porsche and Lamborghini vehicles annually.
The site will mainly import vehicles from Europe and Mexico, where Volkswagen and Audi operate large assembly plants.
UP (Nasdaq: UNP) is a Class I railroad with 8,300 locomotives and more than 52,200 miles of track in 23 states.
South Korea-based Hanjin Logistics said Friday it will establish a subsidiary in Mexico to expand its logistics market in North America by the end of the year.
“The Mexican subsidiary will serve as a strategic beachhead for building an integrated logistics network in North America through synergy with the US and entering the South American market, and to prepare for the increase in logistics demand as a result of the nearshoring trend.” according to a press release. “The Mexican company will provide freight forwarding and US-linked trucking services, and plans to further strengthen Hanjin’s competitiveness in logistics services in the North American region.”
In North America, Hanjin says it will focus on handling logistics services for the import of Korean consumer goods brands such as beauty and nutrition products.
In addition, Hanjin plans to expand its fulfillment operations to locations on the US East Coast.
The goal is to improve fulfillment services and attract more business customers looking to enter the US market.
Hanjin Logistics is a subsidiary of South Korean aviation-to-logistics conglomerate Hanjin Group.
Nefab, a global provider of industrial packaging, logistics and digital services, has opened a new facility in Tucson, Arizona.
The 140,000-square-foot facility employs 100 employees and provides warehousing, packaging and logistics services. FLSmidth will be the facility’s largest customer, according to a news release.
“The new facility represents a major investment in our Arizona operations, effectively expanding our capacity in the state,” Hannu Hyttinen, regional director of Nefab US West, said in a statement. “This growth underlines Nefab’s commitment to the region, which is quickly becoming an important hub for the mining, manufacturing and technology sectors.”
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