Toyota's New America First Policy

After lowering its American exposure in response to a scandal involving sticky accelerators, Toyota is coming back to the U.S. in response to the new administration. Between market fundamentals and prodding from the Trump administration, Toyota is taking a new look at its U.S. operations. The auto maker recently signed a deal with Mazda to increase U.S. production by building a $1.6 billion plant in the U.S. The plant had been planned for Mexico, but plans changed after the president tweeted negatively about the idea.

Chester Dawson and Sean McLain report:

The company’s decision to open a $1.6 billion Corolla sedan plant with Mazda MotorCorp. elicited a positive tweet from Mr. Trump, who had pressured Toyota earlier this year to drop plans for making that model in Mexico.

The Japanese auto maker is betting a new production line in the U.S. offers bigger benefits long-term. First, the plant frees up Toyota’s capacity to boost output of high-margin sport-utility vehicles made in Canada and pickup trucks made in Mexico. It also positions the car maker to make a push in the fast-growing market for small crossovers that use the same underlying architecture as the Corolla.

It is a sign that Toyota President Akio Toyoda is bullish on in the U.S. market, where he sees continued growth at a time when the rest of the industry is bracing for a downturn.