LOS ANGELES - Toyota Motor Sales U.S.A. has launched a study into the feasibility of entering the Mexican market by mid-decade.
The study, just begun, has been given high priority. It is being overseen by Dave Illingworth, senior vice president of corporate planning.
The election of Vicente Foxas president of Mexico and the country's improving economic picture has spurred Toyota's interest in the market, a spokesman said.
'The Mexican market is of interest to us. It's the last market in North and South America of that size that we are not in,' said Toyota spokesman Mike Michels.
'The change of administration has galvanized the way people look at Mexico. There is a more stable political environment, and we're seeing some economic growth.'
Light-vehicle sales have surged from 183,806 units in 1993 to 854,523 last year. The top four players in the Mexican market are General Motors, Nissan Motor Co. Ltd., Volkswagen AG and Ford Motor Co., all of whom sell more than 100,000 vehicles annually.
Mexican policy dictates that automakers wanting to sell in Mexico must produce there, or pay a 20 percent tariff on their imports. The policy has had its intended effect - production since 1995 has doubled to about 1.4 million cars and trucks a year.
But the decree ends in early 2004, clearing the way for any vehicle with more than 62.5 percent North American content to be sold in Mexico without the tariff penalty.
In addition, Mexico and Japan are drafting a bilateral 'investment treaty' that would allow Japanese automakers to sell vehicles in Mexico without having to pay the 20 percent tariff, regardless of whether the vehicle was built in North America or elsewhere.
That treaty is expected to be ratified this summer.