One of Toyota’s best-selling cars will be produced in Mexico instead of Cambridge, Ont., starting in 2019, the company announced Wednesday.

The compact Corolla will be built in a new $1 billion (U.S.) plant in central Mexico, as well as an existing facility in the southern U.S., the company said.

The Cambridge plant will produce a mid-sized higher-value vehicle yet to be announced, Brian Krinock, president of Toyota Motor Manufacturing Canada, said in an interview.

“We’re still in the planning stages,” he said.

The move is part of a multi-year plan by the global automaker to realign its manufacturing operations in North America, grouping production by common vehicle platforms to improve efficiency and enhance flexibility, Toyota Motor Corp. said in a statement.

Unifor national president Jerry Dias said Toyota’s decision is bound to mean future job cuts as the plant will be losing a high-volume product.

“Our phone’s been ringing off the hook. People at the plant are concerned. Corolla has been their bread and butter for 27 years,” said Dias, whose union represents auto workers at Ford, Chrysler and General Motors. “It’s another slap to our industry.”

The plan comes amid growing fears Ontario is losing out in the global race to shift auto production to the lowest-cost jurisdictions. On Friday, Ford is expected to announce a $2.5 billion investment in Mexico to build new engines and transmissions, according to wire service reports.

“Our challenge with Mexico is we're fighting over new (product) mandates . . . we're determined to win some of those,” Ontario’s Economic Development Minister Brad Duguid told reporters at Queen’s Park. “Mexico is a fiercely competitive environment.”

But Duguid said Toyota “has confirmed the job footprint will remain the same and … if anything this is good news for Ontario because we will be producing a higher-end vehicle and there is more value in that.”

The company employs 8,000 people in Canada, including about 3,000 at the plant that assembles the Corolla.

Auto industry consultant Dennis Desrosiers said Toyota’s decision makes sense.

“Canada’s not competitive enough to produce small entry-level vehicles like the Corolla. Toyota’s decision to put a higher value-added vehicle in its place gives its workers a lot of job security and keeps that plant open,” the president of DesRosiers Automotive Consultants said.

Toyota will also make significant new investments – in the “hundreds of thousands of dollars,” Krinock said – over several years in its two other assembly plants in Cambridge and Woodstock.

The Woodstock plant will continue to make the RAV4, a vehicle competing in a rapidly growing segment. The Cambridge South plant will continue to build the luxury Lexus RX 350 and 450h.

Cambridge North could replace the Corolla with the RAV4, the Highlander, more Lexuses or a new vehicle yet to be announced, industry observers speculated.

Sales of the RAV4 climbed 23 per cent in 2014, according to researcher Autodata Corp., and it shares the same platform as the Corolla.

Toyota said the new plant in Mexico will employ about 2,000 people and have a capacity to produce up to 200,000 Corollas a year.

In its first major production announcement in three years, Toyota also said it will build a new plant in China.

Toyota had put its expansion plans on hold after its chairman blamed a series of massive safety recalls on the fact the automaker had grown too fast.

Loading... Loading... Loading... Loading... Loading... Loading...

More than 10 million Toyota vehicles were recalled around the world for faulty brakes, sticky gas pedals, ill-fitting floor mats and a range of other defects.

Toyota is still embroiled, along with other automakers, in a recall involving air bags made by Takata Corp. of Japan which can deploy and rupture with enough force to cause injury or death.

Mexico and China are two markets where auto demand is expected to rise in coming years, a Toyota executive told reporters during a briefing by video from Nagoya, Japan.

with files from Star staff, wire services

………………

What Toyota makes in Ontario

Cambridge north plant:

Makes the Corolla S

Employs about 3,000 people

Cambridge south plant:

Makes the Lexus RX 350 and Lexus RX 450h

Employs about 2,600 people

Woodstock west plant:

Makes the Rav4 crossover utility vehicle

Employs 2,400 people

Produced 220,000 vehicles in 2014.

Read more about: