Toyota’s engine manufacturing plant in Porto Feliz (SP), Brazil, will not resume full production until 2028 after suffering severe structural damage caused by a storm in September 2025. The facility, responsible for producing flex-fuel ICE engines for models such as Corolla, Corolla Cross and Yaris, was heavily damaged, requiring complete reconstruction. Only the original foundation slab will be reused, with a new industrial building designed to incorporate higher levels of automation and a more compact manufacturing layout.
During the reconstruction period, Toyota implemented contingency measures, including the installation of a temporary structure in Porto Feliz to maintain partial engine production. Part of the workforce was reassigned to the Sorocaba plant, while other employees entered temporary layoff programs. The company plans to test a new productivity and manufacturing concept by the end of 2027, with full operational normalization scheduled for 2028.
Source: AutoData Read The Article
PSR Analysis. Toyota has implemented a temporary multi-origin supply chain, importing fully assembled engines—mainly from Japan—while performing final assembly of semi-knocked-down units in Brazil. This hybrid model mitigates short-term production risks but increases logistics complexity and FX exposure. The use of Japan, Turkey, and Indonesia reflects global manufacturing flexibility, yet signals reliance on external capacity during the Porto Feliz shutdown. Local assembly of flex-fuel engines helps preserve partial local content and regulatory alignment. As a contingency structure, the model entails higher lead times and cost sensitivity. Its viability depends on disruption duration and exchange rate stability, with potential margin pressure if prolonged. PSR
Fabio Ferraresi is Managing Director, South America, for Power Systems Research
