Following the announcement of a new Corolla plant for Mexico and the expanded Guangzhou joint venture in China, Toyota has also announced a multi-year plan to ‘realign’ its manufacturing operations in North America to support its ‘Toyota New Global Architecture (TNGA)’, described as “a comprehensive approach to achieving sustainable growth by making ever better vehicles more efficiently”.
Mexico
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The new Mexican Corolla plant is a key part of the plan. Toyota will spend about US$1bn to construct the factory in the state of Guanajuato in Central Mexico. It will have the newest TNGA production engineering innovations, employ approximately 2,000 people and have capacity to produce 200,000 units a year.
The plant will begin producing the Corolla for the 2020 model year. It will be Toyota’s 15th in North America, its first since 2011 (Toyota Mississippi which also makes the Corolla was the last) and its largest investment in Mexico to date.
The plant will be the first worldwide designed from the ground up with TNGA production engineering technologies and will leverage the existing strong supply base and transportation infrastructure in the region.
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Toyota will also establish a plant preparation office in the state of Queretaro.
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By GlobalData“Having produced vehicles in this country [in Baja California] for more than 13 years, we know that the strength of the workforce and manufacturing capabilities in advanced technology make Central Mexico the right place for our newest facility,” said Mike Bafan, president, Toyota Motor Manufacturing de Baja California (TMMBC) and project leader for the new plant.
“Our announcement further reaffirms our commitment to our Mexican team members, dealers, partners, suppliers and customers, and we look forward to future success together.”
The start of Corolla production in Mexico in 2019 will affect the automaker’s NAFTA production north of the border. Once the Mexican factory is up and running, Toyota Motor Manufacturing Canada (TMMC) will switch its Cambridge, Ontario North plant from the Corolla sedan line to “mid-sized, higher-value vehicles”, the automaker’s first major spend on the plant since it opened in 1997.
Canada
Toyota said it would also make “significant new investments over several years” in TMMC’s assembly plants in Cambridge (also the only factory outside Japan to assemble the Lexus RX SUV line) and Woodstock, Ontario (which currently builds NAFTA market RAV4 compact SUVs) to implement TNGA modifications, maintaining the Canadian factories’ importance as a strategic manufacturing hub.
Toyota said the TNGA changes at these plants would require major modifications to the two assembly plants in Cambridge and the one in Woodstock. These projects would take place over the next several years.
The Woodstock plant will continue to manufacture the RAV4, a vehicle competing in a rapidly growing segment. The Cambridge South Plant will continue to build the Lexus RX 350 and 450h, the newest models of which were recently unveiled.
“This commitment to Toyota manufacturing in Canada is a huge vote of confidence in our [workers],” said Brian Krinock, President of TMMC. “With a new platform, new products and new technology, Toyota’s continued investments in Canada will take us to the forefront of advanced manufacturing, further drive our competitiveness and position us for sustainable success.”
By 2019, the Cambridge, Ontario plants will all be producing those as yet unspecified “higher-value mid-sized vehicles” along with Toyota Motor Manufacturing, Kentucky (TMMK) and Toyota Motor Manufacturing Indiana (TMMI). The new factory in Mexico and Toyota Motor Manufacturing, Mississippi (TMMMS) will build the Corolla, consolidating compact vehicle production to the southern US and Mexico.
These groupings by common vehicle platform follow Toyota’s consolidated truck production at its San Antonio, Texas and Baja California, Mexico plants, which has helped streamline Tacoma and Tundra assembly while better leveraging the supply chain.
“These moves advance Toyota’s efforts under TNGA to group production by common vehicle platforms in each North American plant to improve efficiency and enhance flexibility,” the automaker said in a statement.
“We are thrilled to invest further in North America so we can better meet the needs of our customers for decades to come,” said Jim Lentz, chief executive officer of Toyota North America.
“This strategic rethinking of how and where we build our products will create new opportunities for our company, our business partners and our team members across the region.
“Our next-generation production facility in Mexico will be a model for the future of global manufacturing and set a new standard for innovation and excellence. Transforming our Canadian vehicle assembly plants is an equally important part of our strategic plan to position the North America region for sustainable long-term growth.”
According to Toyota, TNGA boosts vehicle quality and appeal while achieving cost savings through production engineering innovations, building more models on common platforms, the “intelligent” use of common parts and more fully leveraging the supply chain.
By focusing on the joint development of vehicle powertrains and platforms, TNGA enables Toyota to produce vehicles with a lower center of gravity and lighter, more compact components, delivering, the automaker claims, enhanced driving performance, greater fuel efficiency, exceptional visibility, more attractive styling and high quality collision performance.
