Toyota ramps up its truck production, with caution

DETROIT -- Toyota Motor Corp. plans to boost light-truck output in 2016 to tap the hot market for SUVs and crossovers, but it will do so cautiously with an eye to the flattening market, said Jim Lentz, CEO of Toyota North America.

The shift is already underway.

For 2015, the truck-car sales ratio at Toyota, Lexus and Scion was 50-50. But in December, trucks accounted for 53 percent.

Today, Toyota light-truck output supplies 54 percent of the mix, Lentz told Automotive News during the Detroit auto show.

Toyota is tweaking work shifts at its Texas assembly plant to yield more pickups and is ordering more RAV4 crossovers from Canada. Meanwhile, an expansion at its Indiana plant comes online this spring, adding capacity for another 30,000 Highlander crossovers.

"We are moving production as rapidly as we can," Lentz said. "We're making a bunch of small adjustments that allow us to pick up 10,000 here, 20,000 there, 30,000 there."

Jeff Bracken, general manager at Lexus, said he also will skew Toyota's luxury brand toward light trucks. Lexus will start 2016 targeting a 55 percent truck mix, up from about 50 percent last year, he said.

If Lexus bets wrong, and truck demand weakens, Bracken said it would take 60 to 90 days to ratchet production down again.

"It wouldn't be drama for us," he said. "We won't overreact."

Whereas Toyota Motor's overall truck ratio sat about seven percentage points below the industry average five years ago, it lags the industry by just two points today, Lentz said.

Toyota's truck index is rising. But the company won't follow the industry whole-hog into a light-truck binge, Lentz said, in part because of memories of the 2009 financial crisis.

"In our rearview mirror is the deep recession to 10 million units," Lentz said. "I can't tell you how long gas prices will stay low. All it takes again is something getting sunk in the Straits of Hormuz, and the price of gas changes overnight. I don't want to put all my eggs in one basket."