Yen strength prompts Toyota to consider new Mexico plant

TOKYO Sun Oct 17, 2010 9:18pm EDT

TOKYO (Reuters) - Toyota Motor Corp (7203.T) is considering building its second car plant in Mexico to boost local output due to the yen's strength, the Asahi newspaper reported on Saturday.

The yen's rise to a 15-year high against the dollar is threatening the competitiveness of Japanese exports and prompting manufacturers to consider shifting more output outside Japan.

Toyota, which makes pickup trucks mainly for the U.S. market in Mexico, plans to produce compact cars for North America at the new factory from around 2013, the paper said, without citing sources.

The carmaker now exports compact cars to the region from Japan, but strength in the yen is pressuring its profits, the Asahi said. The paper also said Toyota will respond to growing demand for low-cost compact cars in Mexico with the new plant.

Toyota is also considering halting exports from Japan of the Collora sedan from around 2013 due to the strong yen, Japanese media reported earlier the week.

(Reporting by Nobuhiro Kubo; Editing by David Fox)