Toyota Shells Out Big Bucks: 600 Million For Third Brazilian Factory

It’s a little known fact, but Toyota’s first factory abroad was in Brazil. Toyota started producing their Bandeirante (known elsewhere as Land Cruiser, full history here) locally in CKD mode in 1958. In 1962, the factory in São Bernardo do Campo, São Paulo state was inaugurated. There, Toyota do Brasil produced the 4WD, almost unchanged, until the year 2000. The site is still productive, but now only makes parts. In the 90s, they inaugurated another factory in Indaiatuba, SP state, too, to produce the Corolla. In September, construction of the third Toyota factory in Brazil will begin in Sorocaba, São Paulo state.

How significant is this? Well let’s say if all goes according to the “unmentioned” or “speculative” plan (depending on whether you are the company or the press), Toyota will turn Brazil’s version of the local Big 4 into a Big 5.

Toyota do Brasil is, as always (as evidenced by their feet-dragging with the Bandeirante), being very wary or vey prudent and low key. As they cautiously said in a press release, “in search of sustainable growth, Toyota aims to expand its local production, in consonance to the growth of the Brazilian and other emerging markets.” That as reported in the Brazilian car enthusiast site Auto Esporte.

However, the numbers belie this caution. US$600 million and a planned capacity for a production of 70,000 cars annually (numbers taken from aforementioned site) mean they are now really going to jump into the fire. No official word of what car will be produced at the new factory was given, but Brazilian car site webmotors (not to mention the speculation that’s been going on for literally years in Brazilian car mags and sites) was happy to chip in that it will be the Ethios (pictures here). In hatch and sedan form. In 1.0L and bigger engines form. So right in the meat of the market (remember compact, or subcompact to Americans’ eyes, 1.0L cars are 50 percent of the market down here).

So, is Toyota going to take a place along the Big 4? It depends on pricing. If they can offer the car for around the R$30.000 (US$16,667), I say the Ethios will be in the Top 10 and Toyota will turn the Big 4 into a 5. But if the price-cutting, er, cost-control measures are not effective enough and the car is sold at the 40K real mark, it’ll be a niche player and Fiat, VW, Chevy and Ford will be able to breathe easy.

Let the games begin!