Toyota has said that its new plant in San Antonio, Texas, will have cost around US$1.28bn, US$480m more than originally planned.

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When the plant was first announced in February 2003, Toyota was going to invest US$800m to build 150,000 Tundra pick-ups a year. The company quickly decided to expand capacity at the plant to 200,000 units, increasing its investment to US$850m.


Toyota has attributed the remaining US$430m overspend to rising material costs, especially for steel; and additional infrastructure needed for the on-site suppliers. Building contractor wages and building materials were more expensive than planned because of the impact of Hurricane Katrina.


According to Gary Convis, executive vice president of Toyota Motor Engineering & Manufacturing North America Inc., quoted on the website of the US publication Autoweek, another major reason for the overspend is that Toyota decided to use some advanced manufacturing technology that had not originally been budgeted for.


Convis reportedly said that the Texas is plant is now Toyota’s most technologically advanced. Apparently journalists given a tour of the plant were not allowed to see some new proprietary technology in stamping and welding.

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In addition to the assembly plant, the 2,000-acre site houses 21 suppliers, which produce parts and components and ship them directly into the plant. The on-site suppliers will employ 2,100 people at full production, and have cumulatively invested approximately an additional US$300m.


The Tundra goes on sale in the US in February. Although cars are being built now and sent to dealers, it will not be offered for sale until a full engine line-up, is available. At the moment the Tundras are being produced with 4.7 litre V8 or V6 engines. But Toyota wants to offer the Tundra with 5.7 litre V8 engines, which go into production in January at the company’s Huntsville, Alabama, plant, according to AutoWeek.