As far as North American investment goes, Toyota is on fire.
With little fanfare over the past several months, the world's No. 2 automaker has set projects in motion to enlarge almost every one of its North American operations.
Toyota is expanding production capacity at five assembly plants in the United States, Canada and Mexico. As part of those efforts, it is expanding the size of two factories that have not yet opened. It also is preparing to build its second North American commercial truck plant and increasing component production at four of its wholly owned component plants.
Toyota also is preparing to increase the size of its r&d unit in Michigan and is scouting for a place in the United States to build what will be another transmission factory.
"They are going for it," observes Alan Baum, an industry forecaster with the Planning Edge in Birmingham, Mich. "They're growing rapidly in this market and simply responding to the market."
Toyota is experiencing an American reality that is markedly different from that of its domestic competitors, General Motors and Ford Motor Co. While both U.S. giants struggle with downsizing, Toyota is picking up market share. Toyota Motor Sales U.S.A. sold 2,260,296 Toyota, Lexus and Scion units in the United States last year, up 39.6 percent from the 1,619,206 Toyota and Lexus units sold five years earlier.
In the past 90 days, Toyota has announced plans to:
- Use a Subaru factory in Lafayette, Ind., to increase North American Toyota Camry capacity by 100,000 cars a year.
- Expand the original scope of a Toyota RAV4 SUV factory that is barely under way in Woodstock, Ontario, targeting 150,000 vehicles a year instead of the 100,000 a year announced last summer.
- Enlarge its year-old Toyota Tacoma plant in Baja, Mexico, adding 20,000 of the pickups a year.
- Build a Hino commercial truck factory in Woodstock, Ontario, complementing Hino truck production in Long Beach, Calif.
The company is scheduled to open a Toyota Tundra pickup factory in San Antonio this fall. That project was planned to yield 200,000 Tundras a year; but last summer, Toyota expanded the plant to create capacity for 250,000 a year.
Toyota also is adding 50,000 units of annual capacity to its Georgetown, Ky., plant to produce a hybrid Camry.
Baum says he believes there are added risks for Toyota as it increases capacity.
"In the past, they could assure themselves of very stable and predictable volumes," he says. "They were only building 100,000 to 150,000 Tundras, and there wasn't much risk. Now, for example, they're planning capacity of 400,000 Tundras. They will be opening themselves up to bigger fluctuations in sales."
You may e-mail Lindsay Chappell at [email protected]