Toyota Motor Corp. hasn't said where it will build its next North American assembly plant. But one issue that can't wait is engine capacity.
Here's the problem: Toyota will be able to build up to 1.7 million cars and light trucks in North America next year - about 300,000 more than last year. But the automaker is expected to have capacity for only 1.4 million engines and 600,000 transmissions.
Toyota and key suppliers are spending more than $475 million to increase engine and transmission production.
In April, Toyota Motor Manufacturing Alabama LLC spent $250 million to expand its engine plant in Huntsville, Ala. Huntsville's capacity for V-8 engines will double to 300,000 a year.
That will raise the plant's total annual capacity to 400,000 engines. Huntsville also builds V-6 engines. Also, Toyota will spend $120 million to expand production and automatic transmissions at its engine and transmission plant in Buffalo, W.Va. That will boost annual capacity by 240,000 units.
With that expansion, Toyota will be able to build 600,000 transmissions a year in North America.
To get there, Bodine Aluminum Inc. of Troy, Mo., will expand a $120 million plant project under construction in Jackson, Tenn. Bodine will spend an additional $40 million to supply Toyota with transmission housings and cases.
Bodine is Toyota's wholly owned U.S. engine castings supplier.
The Tennessee plant already was planning to supply 1 million engine blocks a year for Toyota's three U.S. engine plants - in Huntsville, Buffalo and Georgetown, Ky. The extra capacity means Bodine's operations in Troy, Mo., can cast more engine heads. Troy will begin producing V-6 engine heads this year for Georgetown and Buffalo.
Last year, affiliated Toyota supplier Aisin Seiki Co. Ltd. also announced that it will build a U.S. engine castings plant to supply Toyota. That plant, in Clinton, Tenn., will come on line 2007. The cost: $67 million.
Any additional engines or transmissions that Toyota needs will be imported.
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