HUNTSVILLE, Ala. - As Toyota Motor Corp. pushes further into products geared to the U.S. market, the automaker is also pushing deeper into locally sourced engines and powertrains to drive them.
Last week Toyota announced it will spend $220 million to build a third North American engine plant, this one in Huntsville. The factory will yield 120,000 V-8 engines annually for the company's Tundra pickup, a vehicle produced exclusively for North America.
U.S. demand for big trucks is forcing Toyota to deepen its local manufacturing roots into new territory.
'We will do one thing at a time, and if we do it well, we will go on and do more,' said Toyota Motor President Fujio Cho, who flew to Alabama for the announcement on Tuesday, Feb. 6.
Cho said the plan is to supply engines only for the Tundra. But Toyota has never built a North American auto factory that it did not subsequently expand.
The same Princeton, Ind., plant that produces the Tundra also has begun turning out the large V-8-equipped Sequoia sport-utility on the same platform. The Sequoia uses the same V-8 engine, imported from Toyota's Tahara plant in Japan.
At the same time, Toyota Motor North America Inc. is spending $800 million to double that plant's capacity to accommodate the addition of the Sienna minivan in 2003.
The Huntsville project comes less than two weeks after Toyota's announcement that it will boost engine production at its engine plant in Buffalo, W.Va. On Jan. 26, Toyota North America revealed its plan to move the engines and automatic transmissions for the Lexus RX 300 into production in the United States, following the addition of RX 300 production at the Cambridge, Ontario, assembly plant.
Production starts in 2003
Production of the six-cylinder powertrain begins in 2003, as the new Huntsville plant comes online.
The company's other North American engine plant is in Georgetown, Ky.
The timing of the Huntsville project is significant because the Tundra is scheduled for a redesign in 2003. Vehicle makeovers typically include engine improvements and component changes up and down the powertrain.
Toyota officials would not say whether their upcoming Alabama engine will be the same V-8 that the U.S. manufacturing operation imports from Japan or whether it will be a new engine.
Iron or aluminum?
A key issue will be whether Toyota keeps the engine's iron block. Toyota's other U.S.-made engines are all-aluminum. The aluminum castings are supplied by Toyota's St. Louis-based subsidiary, Bodine Aluminum Inc., which has expanded in lock step with the automaker's growing U.S. engine capacity.
But Toyota Motor Manufacturing North America Senior Vice President Dennis Cuneo said that 'no sourcing decisions have been made on the V-8.'
Cuneo said Toyota will be producing vehicles and engines at equal levels in North America. 'Our total engine capacity, including Huntsville, will be just over 1.16 million,' he said. 'And our vehicle production last year was just over 1 million. So it's tracking pretty closely.'
But by 2003, the company plans capacity to produce 1.45 million cars and trucks in North America. That would represent a need for nearly 300,000 additional engines - either imported, or built by still more expanded North American plants.