DALLAS -- The end of Camry production at Subaru's plant in Lafayette, Ind., will give Toyota more flexibility over inventory amid a sales slump for the nameplate and the entire car segment.
But Toyota has no plans to significantly curb production of the nation's top-selling sedan. Indeed, it intends to vigorously defend that title, even as SUVs and crossovers begin to eclipse the sedan market.
"It's still the bread-and-butter of the Toyota Division," Bill Fay, Toyota Division general manager, told Automotive News. "The overall car market is down 8.1 percent through July while the light-truck segment is up 9 percent, so clearly all of the industry growth and strength for this year has been on the light-truck side. Within that dynamic, the Camry continues to do very well."
The agreement with Subaru goes back to the mid-2000s, a time when Subaru was a middling niche brand and Toyota was feasting on the Detroit 3.
Eager to add more local production capacity to meet surging U.S. demand, Toyota found a tempting opportunity in Subaru's Lafayette plant, built in the late 1980s as a joint venture with Japanese truckmaker Isuzu. Isuzu production had ended there in 2004, and in 2005 Toyota acquired a large stake in Subaru parent Fuji Heavy Industries from a struggling General Motors. Production of the Camry began in Lafayette in 2007 and amounted to 97,000 vehicles a year.
Since that time, Subaru has seen breakneck growth and has recently been straining to meet record U.S. demand for its lineup of all-wheel-drive wagons and crossovers. In 2014, Subaru and Toyota confirmed plans to end Camry production by the fall of 2016. Subaru announced last year that it will build a seven-seat utility vehicle at Lafayette after 2017, using capacity that's separate from the Camry line.
"I think the relationship with Subaru worked out really well," Fay said. "It's nice to bring it back into our own plant, and I think we've got a little more flexibility going forward."