Reports from the United States suggest Toyota Motor Corporation is scaling back plans to build more plants there.
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Citing the Wall Street Journal (WSJ), the Associated Press (AP) said the automaker is concerned that it has built too many factories in the US and is slowing plans to expand manufacturing.
Recent Toyota expansion ventures include taking a stake in the former Subaru-Isuzu plant to expand production of its popular Camry sedan line (alongside current Subaru models) and a new plant in Texas building the new full-size Tundra pickup. That new truck, sized and specified to take on domestic models, has not sold as well as hoped and dealers are having to offer incentives worth thousands to ‘shift the metal’ (as are some domestic rivals), according to recent reports.
According to AP, citing the WSJ, Toyota sales continue to grow but executives are worrying about an uncertain outlook.
In addition, the cheap yen has made it more profitable for the company to produce cars in Japan and ship them to the US, according to a senior executive and management board member the Journal reportedly didn’t identify by name.
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By GlobalDataThe increasing number of Japanese-built vehicles heading into the US has begun to attract politicians’ attention in recent months.
Toyota Tokyo spokesman Tomomi Imai declined to comment to the Associated Press on the WSJ report.
“Toyota has just announced the new Mississippi plant, where production is set to start in 2010,” Imai told the news agency. “As for North American plants after that, nothing has been decided.”
AP said the assembly plant on the outskirts of Tupelo, Mississippi, will be Toyota’s eighth North American vehicle assembly plant and the fourth new such facility in the past five years.
Breaking ground a few months ago, Toyota said the new plant would build the Highlander (Kluger) SUV. That model is currently imported from Japan.
The news agency added that, despite the reported concerns about US production expansion, the US likely is to remain one of Toyota’s most profitable markets as a recent shift to more fuel-efficient cars has helped increase Toyota’s US sales even as Detroit’s automakers struggle.
Toyota’s leading position as a hybrid maker should also help, though the fuel-efficient Prius, very popular with US buyers stunned by petrol price hikes, is imported from Japan – so far the only other country in which it is assembled is China. Toyota does, though, assemble the Camry hybrid in Kentucky.
The Associated Press noted that Toyota’s decisions to add plants in the US always have involved more than maximizing manufacturing efficiency – the automaker regards building more vehicles in the US as a form of political insurance and has long has been concerned about a resurgence of trade tensions.
Nonetheless, recent reports show that has surfaced again as politicians and domestic automaker groups have highlighted the number of vehicles being imported from Japan by automakers with US plants.
Some of Toyota’s plants in Japan are capable of building more than six different vehicles but, in North America, several build just one or two models, making them somewhat inflexible to adjust to sudden swings in demand, the Associated Press noted.
