Bucking the trend, Toyota to produce the Corolla Cross in Brazil despite “Brazil cost”

RIO DE JANEIRO, BRAZIL – Toyota’s new model, the Corolla Cross is starting to be produced in Brazil as the brand’s model to reach more consumers in the region. The SUV will be exported to 22 countries in Latin America and the Caribbean.

The Corolla sedan, produced in Brazil since 1998, is exported to five countries – Argentina, Colombia, Paraguay, Peru, and Uruguay.

With more markets to serve, Toyota’s CEO for Latin America, Masahiro Inoue, sees the new model as strategic for the brand, but says measures are needed to help make domestic products more competitive.

“Our dream is to export to other countries beyond the region, but to cross the ocean we have to pay the local logistics cost, which is not easy,” says Inoue. “So we work with suppliers and governments to cut the Brazil cost.”

Rafael Chang, president of Toyota Brazil, adds that the lack of competitiveness is not only Toyota’s, but of the whole industrial sector. He recalls that other countries with which Brazil competes, such as Mexico and Thailand, are working on the development of new technologies for cleaner vehicles, such as electric cars.

“Will we in Brazil have an industrial policy to promote cleaner cars? Is the supply chain ready for this?,” asks Chang. According to him, to trace a longer investment plan, both exchange rate stability and tax reform are also needed.

Nevertheless, the group expects to export 30% of the production planned for this year: 170.000 vehicles, 30% more than in 2020.

Although the Corolla sedan is made in Indaiatuba (SP), Toyota preferred to produce the SUV version in its Sorocaba plant, where the Etios and Yaris are made. To make room for the newcomer, which will also feature a flex hybrid option, the company will stop selling the compact Etios in the Brazilian market as of April, maintaining a reduced production to supply a few countries in the region.

According to Toyota, the adjustment was needed for the coming of the new SUV. However, the decision shows that the Japanese brand is following the strategy of other manufacturers that are abandoning the production of simpler compact cars to focus on more expensive (and profitable) models.

Source: Exame