With U.S. customers clamoring for more light trucks, Toyota Motor Corp. will once again expand its North American factory base.
The company plans to add 200,000 units of annual factory capacity within five years. In the process, Toyota's newest U.S. factory, the Tundra pickup plant in Princeton, Ind., will increase its potential output to 300,000 vehicles a year. That plant began commercial production just one year ago.
In addition, Toyota CEO Fujio Cho said the automaker will extract another 50,000 units of annual capacity from one or more existing North American plants.
Toyota has not revealed what vehicles it will build with the new capacity. Indications are that Toyota has not made up its mind. But the likely answer is more trucks.
Toyota dealers have been selling all of the Tundra full-sized pickups they can get from the new Princeton plant. And some dealerships are turning away customers empty-handed because of shortages of Tundras and Sienna minivans. The Sienna has limited capacity at Toyota's plant in Georgetown, Ky., which also builds Camry and Avalon sedans.
'It's been so difficult all year to get enough of both products,' said John Auen, general manager of Southpointe Toyota in St. Louis. 'Customers get a little frustrated when they come in to see the hot products and they can't get them. We're lucky to have two or three Tundras a day sitting on the lot. It would be nice to have 10 or 15.'
Toyota Division sales are up more than 9 percent for the first 11 months of this year, and they rose 15 percent in November. Last week, Cho forecasted additional sales growth for 2000, even though some U.S. analysts are predicting that industry sales as a whole will shrink modestly.
Toyota is 'tremendously optimistic right now,' said George Gaillard, owner of Toyota of Newburgh in Newburgh, N.Y. 'Especially four or five years out. They've got a lot of new product coming.'
Next year also will see the Princeton plant turn out a new full-sized sport-utility called the Sequoia. Toyota envisioned sales of 50,000 Sequoias annually at full capacity, which would have left the Tundra with space for just 100,000 sales a year. It already is selling at a rate of 80,000 a year.
All told, Toyota's plans will bring its total North American production capacity to 1.45 million cars and trucks a year. That will mark more than a threefold increase over the past 10 years.
Cho announced the $800 million Indiana expansion last week in Tokyo. He had been saying for most of this year that Toyota would make a decision by year-end on whether to expand its American manufacturing base.
But as of last week, engineers at Toyota Motor Manufacturing North America Inc. in Erlanger, Ky., the automaker's central operations office, had not been informed of what product the Princeton expansion will build, or even what shape the expansion will take.
In 1992, Toyota doubled the output of its Georgetown, Ky., Camry plant by essentially duplicating the existing factory there, also at a cost of about $800 million.