Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Toyota pumping $1.45B into Mexico to boost Tacoma production; Union Pacific to serve Volkswagen hub at Texas seaport; South Korean freight transporter to open subsidiary in Mexico; and Nefab expands in Arizona with warehousing and logistics facility.
Toyota pumping $1.45B into Mexico to boost Tacoma production
Japanese automaker Toyota plans to strengthen its manufacturing presence in Mexico with a $1.45 billion investment.
The funding will increase Toyota’s production capacity in the country by expanding factories in the cities of Apaseo el Grande and Tijuana.
The investments will go toward production of Toyota’s newest generation of Tacoma pickup trucks, as well as produce a new line of Tacoma hybrid electric vehicles.
“[Toyota] is one of the companies with which we are working most closely and it has a big future in our country,” said Mexico’s economy minister, Marcelo Ebrard, in a video posted on X Nov. 8 announcing Toyota’s investment. “The government of President Claudia Sheinbaum is committed to providing certainty and confidence to investors, and promoting, through investment, development with well-being in the country. We will continue working as she has asked us to attract more investment and generate quality jobs.”
Toyota’s factory in Apaseo el Grande will receive $1.1 billion in investment and add 450 jobs. The plant currently employs 1,700 workers and produces about 100,000 Tacoma pickup trucks annually, which are exported to the United States.
Apaseo el Grande is in the central Mexican state of Guanajuato and is a major automotive production hub.
In Tijuana, Toyota is investing $336 million to expand Tacoma production, generating 1,200 jobs. The plant employs 2,000 workers and produces about 130,000 Tacomas annually for the U.S. market.
Tijuana is across the border from San Diego.
“At Toyota, we believe in Mexico and in the relevance that investments have for the economic, environmental and social development of the country,” Luis Lozano, president of Toyota Mexico, said in a news release. “With this announcement, Toyota has achieved an investment of more than $3 billion in Mexico, a country that is essential for the regional competitiveness of North America.”
Toyota’s expansion in Mexico arrives as President-elect Donald Trump has floated the idea of adding tariffs of 10% to 25% on all imports from Mexico.
Ebrard said if Trump follows through on that, Mexico might impose tariffs on U.S. goods flowing south of the border.
“If you put 25% tariffs on me, I have to react with tariffs,” Ebrard told broadcaster Radio Formula on Monday. “Structurally, we have the conditions to play in Mexico’s favor.”
Union Pacific to serve Volkswagen hub at Texas seaport
Union Pacific Corp. (UP) said it is the rail partner of choice for Volkswagen Group of America’s recently opened logistics hub in Port Freeport, Texas.
UP officials said they will help Volkswagen distribute imported vehicles to approximately 300 dealerships across the central and western U.S.
“This is a significant milestone for Union Pacific and Volkswagen as we continue our long-term partnership,” UP Director of Marketing and Sales Andrew Dziuda said in a news release.
Volkswagen’s new hub at Port Freeport opened in October. The 120-acre facility features 53 rail car spots. It has the capacity to process up to 140,000 Volkswagen, Audi, Bentley, Porsche and Lamborghini vehicles annually.
The site will mainly import vehicles from Europe and Mexico, where Volkswagen and Audi operate large assembly plants.
UP (Nasdaq: UNP) is a Class I railroad that operates 8,300 locomotives and has over 32,200 miles of tracks in 23 states.
South Korean freight transporter to open subsidiary in Mexico
South Korea-based Hanjin Logistics said on Friday it will establish a subsidiary in Mexico to expand its logistics market in North America by the end of the year.
“The Mexican subsidiary will serve as a strategic bridgehead for building an integrated logistics network in North America through synergy with the U.S. and advancing into the South American market, as well as to prepare for the increase in logistics demand due to the nearshoring trend,” according to a news release. “The Mexican corporation will provide forwarding and U.S.-linked trucking services, and plans to further strengthen Hanjin’s competitiveness of logistics services in the North American region.”
In North America, Hanjin said it will focus on handling logistics services for Korean consumer goods brand imports, such as beauty and food products.
In addition, Hanjin plans to expand its fulfillment business to locations on the U.S. East Coast.
The aim is to improve its fulfillment services and attract more corporate customers seeking to enter the U.S. market.
Hanjin Logistics is an affiliate of South Korean airline-to-logistics conglomerate Hanjin Group.
Nefab expands in Arizona with warehousing and logistics facility
Nefab, a global provider of industrial packaging, logistics and digital services, opened a new facility in Tucson, Arizona.
The 140,000-square-foot facility employs 100 workers and provides warehousing, packaging and logistics services. FLSmidth will be the largest customer of the facility, according to a news release.
“The new plant represents a major investment in our Arizona operations, effectively expanding our capacity in the state,” Hannu Hyttinen, regional managing director, Nefab US West, said in a statement. “This growth underscores Nefab’s dedication to the region, which is rapidly becoming a key hub for the mining, manufacturing, and technology sectors.”