Toyota Motor Corp., known for its cautious approach to new business ideas, will build a supplier park next to its planned pickup assembly plant in Baja, Mexico.
The decision suggests that the Japanese automaker is embracing a concept that its competitors have hailed as a cost-cutting trend.
Toyota's North American management may see the Mexican supplier park as a test bed for an even bigger effort to come - at Toyota's $800 million Tundra pickup plant planned for San Antonio.
Toyota also said Friday, Aug. 15, that it will expand the original scope of the Baja project, which represents the Japanese automaker's first attempt to tap the Mexican auto market. Instead of building 20,000 Tacoma pickups annually as announced a year ago, Toyota will produce 30,000 trucks annually.
Toyota has been cautious about jumping on the bandwagon of some of the auto industry's latest trends. Toyota perennially garners industry citations for product quality and efficiency, and company managers tend to view new approaches warily.
While the Big 3 have outsourced major subassembly work to suppliers, Toyota has continued adding jobs to its own factories to build up subassemblies. The reason: Toyota thinks its own workers are typically more productive at subassembly than suppliers.
Toyota also has cast a cold eye on supplier parks, until now. But competitors have been busy validating the concept.
Last week in Canton, Miss., Nissan North America Inc. launched the 2004 Nissan Pathfinder Armada SUV, its second vehicle at a new assembly plant that makes extensive use of a supplier park. The first was the 2004 Nissan Quest minivan.
A handful of suppliers at the plant produce major vehicle modules on Nissan's property and move them on conveyors into the Nissan production line.
Nissan executives say the arrangement reduces transportation and inventory handling costs, as well as speeding up the production flow.
Ford Motor Co. operates a similar concept in Brazil and has been a major advocate for supplier parks in Europe.
It is constructing a large-scale supplier park around its Chicago assembly plant and has developed a modified version in Norfolk, Va.
Meanwhile, Toyota has indicated other manufacturing changes to come.
Toyota Motor Manufacturing North America CEO Atsushi Niimi told an industry audience two weeks ago that the company plans to unveil a custom-ordering system next year that integrates Toyota's auto dealerships with its North American factories.
According to Niimi, buyers will be able to custom-order vehicles from the factory and receive them only a few weeks later.