Toyota’s Tacoma is one of the hottest vehicles in one of the hottest segment right now. Midsize truck sales have exploded for GM, Nissan, Toyota, and even Honda over the past two years. To keep up with demand, Toyota maxed out its U.S. operations and is now planning to expand its TMMBC plant in Mexico to increase Tacoma production by about 25%. Will the shift matter to a company that has promoted its trucks as being made in the U.S.A?
Unlikely, is our opinion. Although the “Made In the U.S.A.” tagline is always helpful, vehicles that people like, sell, regardless of where they are made. Toyota’s main competitors for the Tacoma are the Chevy Colorado and GMC Canyon. Built primarily in Wentzville, OH, these trucks are as American as apple pie. Except for their optional, and very popular, Duramax diesel engines, which customers cannot get enough of. Those engines are built in Thailand. GM has a joint venture with Isuzu and does make some Duramax engines in the U.S., but not the ones for the midsize trucks.
- Background: Toyota preparing Tacoma factory for a successful 2015 and 2016
There are two schools of thought on what happens when an automaker adds more production destined for U.S. buyers in Mexico, Canada, or another foreign country. Some say that this expansion should have been in the U.S., and thus, the job of an American citizen has “been lost.” Another school of thought holds that since the existing production has not moved, and is still in the U.S., San Antonio Texas in the case of the Tacoma, no U.S. jobs are “lost.” The company simply chose to build the added vehicle capacity someplace else. The second group doesn’t subscribe to the notion of “opportunity cost,” something any business school graduate can explain in her sleep.
- Why Is Toyota Adding Tacoma Production In Mexico?
Right now roughly 60% of Tacomas are built in Texas, and those get the stamp you see at the top of the page. The manufacturing location stamp is on the door jam of every Tacoma. I photographed the one that is in my driveway (a media test vehicle). After the expansion is complete in late 2017, about half of the approximately 60% of the Tacomas that Toyota produces for sale in the U.S. will be built in Mexico by our math. Will drivers open that door, look for the Made In the U.S.A. sticker and only buy those that have it, leaving the Made in Mexico trucks to sit unsold? Doubtful.