Toyota will close its factory in Indaiatuba, in the interior of São Paulo state, on June 30, ending 28 years of production at the site that made the Corolla a locally built model in Brazil.
The Japanese automaker is transferring Corolla sedan production to its expanded industrial complex in Sorocaba, also in São Paulo state. A second unit inside that complex is scheduled to open in November 2026, according to reports by Estadão, Quatro Rodas and UOL.
The shift is part of an R$11 billion investment plan through 2030, roughly USD 2 billion at recent exchange rates. Toyota announced the plan in March 2024 at an event attended by Brazil’s Ministry of Development, Industry, Commerce and Services (MDIC), which said R$5 billion would be invested by 2026.
Why Toyota Is Moving
Toyota says concentrating production in Sorocaba should improve logistics, integrate assembly lines and align the company’s Brazilian operation with its broader push into hybrid technology. The Sorocaba complex already produces models including the Corolla Cross and the Yaris Cross.
The company’s decision also reflects the cost of keeping an older plant competitive. The Indaiatuba factory opened in 1998 and would have required a deeper modernization effort after almost three decades of operation. Quatro Rodas reported that Toyota judged it more efficient to expand Sorocaba than to overhaul Indaiatuba.
The move comes as Brazil’s auto market faces new pressure from Chinese manufacturers, including BYD and GWM, which have been expanding in the country with aggressive pricing and electrified models. Toyota’s Brazilian strategy centers on hybrid-flex vehicles, a technology that combines electric assistance with engines able to run on gasoline or ethanol, a common fuel in Brazil.
Labor Deal and Jobs
The closing of Indaiatuba has been negotiated with the Metalworkers’ Union of Campinas and Region. G1 reported in May 2024 that the plant had about 1,500 employees and that workers approved an agreement covering transfers, job stability and a voluntary severance plan.
Under that agreement, according to G1, employees who chose voluntary departure could receive 45 salaries plus two additional salaries for each year worked. Workers who transferred to Sorocaba received moving-related benefits and job stability through July 2029, while Indaiatuba employees had stability through July 2026.
UOL reported that the transition had earlier triggered a strike and a legal dispute over the removal of equipment from Indaiatuba. Toyota and the union later reached an agreement on the voluntary severance plan and transfer conditions, ending the labor impasse tied to the closure.
Toyota says the Sorocaba expansion will create about 2,000 new direct jobs. The MDIC said in 2024 that Toyota expected more than 2,000 direct jobs by 2030 and up to 10,000 jobs including indirect positions.
A Hybrid-Flex Bet
The Indaiatuba plant produced more than 1 million vehicles over its lifetime, according to Toyota and Brazilian media reports. G1 also reported that the site produced the world’s first hybrid-flex models, a point Toyota has used to highlight Brazil’s role in its low-emissions strategy.
Sorocaba is now set to become Toyota’s main passenger-car manufacturing hub in Brazil and a center for hybrid-flex development in South America. The company’s investment plan includes expanded vehicle and engine capacity, new hybrid models and more local production of parts and advanced systems.
For Toyota, the closure marks the end of a symbolic chapter in Brazil. For the company’s future in the country, the larger test is whether a consolidated, newer production base can lower costs while supporting the hybrid-flex strategy that Toyota has chosen for one of Latin America’s largest auto markets.