Toyota’s trading arm, Toyota Tsusho, will establish a steel pipe processing company in the region of Queretaro, Mexico, as a way to meet the growing demand from the local automotive market, the company said on Thursday.
According to Toyota Tsusho, a new subsidiary will be established as Toyota Tsusho Steel Pipe de Mexico, a joint venture between Toyota Tsusho Mexico and Toyotsu Steel Pipe & Tubular Products.
The new plant will be established in July 2015 at the Queretaro industrial park, but operations are expected to begin in October, the company said.
“Mexico is one of the countries in which Toyota Tsusho is focusing on developing new markets for its investments. The company has carried out market research with the aim of creating new business in the Mexican automotive field, which is expected to continue growing in the future,” the company said in a statement.
The company noted Japanese-affiliated auto parts manufacturers are entering the Mexican market and “expanding their factories to support increased production of four-wheel vehicles by Japanese automakers as well as the growth of various industries in the region.”
“Japanese automakers are also building plants in the neighboring State of Guanajuato. Amid this activity, the demand for processed automotive steel pipes has surged, and users are increasingly seeking local procurement options,” the statement continued.
Toyota Tsusho also has a stake in the management of Maruichimex, a Mexican JV that manufactures various steel pipe and tube products.