Japan’s Toyota (7203.T) will invest $328 million more in a plant in the central Mexican state of Guanajuato on Thursday as it looks to adapt its production processes for a new hybrid model of its Tacoma pickup truck. The new Tacoma will be available with a 2.4-liter hybrid system that, in addition to improving fuel economy, delivers more pulling power. That would be a boon for those who use their trucks for off-road driving, an increasingly popular form of the pickup segment.
The investment indicates that Toyota believes the time to start building electric cars in Mexico is now, even as it continues to make traditional gasoline-powered vehicles at its plants in the country. Carmakers across the globe are increasing investments in electric vehicles to comply with stricter pollution regulations and address concerns about climate change. But EVs have yet to be widely used in many markets, including Mexico, which has about 1,100 charging stations and often limited service for long drives between cities.
Toyota has been producing its Tacoma pickup in Mexico since 2004, when it invested $140 million to set up the TMMBC factory in Tijuana, on the border with the US. This was followed by another $600 million in 2014 to expand the plant’s capacity. The company also has a vehicle assembly facility in San Antonio, Texas, which makes Tacomas and the full-size Tundra pickup.
But Toyota’s share of the midsize pickup market has shrunk in recent years as rivals such as Chevrolet’s Colorado and Canyon pickups, GMC’s Ridgeline, Honda’s Ridgeline, and Ford’s Ranger have come back to life after brief hiatuses. Toyota’s new Tacoma with a hybrid drive will compete directly with these vehicles and be sold in off-road versions offering more traction and towing capability than the base model.
The new Tacoma is expected to go on sale this fall and will be offered with several different trim levels. The most expensive version, the Tacoma Limited, will include features such as a 10-speaker stereo and power-retractable side steps. In addition, the Tacoma will be available with a TRD Pro version that includes off-road gear, such as a locking rear differential.