DALLAS -- Toyota will invest $150 million at its Tijuana, Mexico, assembly plant to increase output of the popular Tacoma pickup amid tight inventory that the company says has held back sales.
The expansion will bump capacity to about 160,000 units annually in late 2017 or early 2018, from just over 100,000 currently, the company said in a statement Wednesday.
The move comes at a time when the Tacoma’s dominance of the U.S. midsize pickup market -- which has grown 21 percent this year -- is being challenged by General Motors, which returned to the segment for the 2016 model year with its well-received Chevrolet Colorado and GMC Canyon. Honda’s Ridgeline, too, is back in the market and selling briskly, and Nissan’s Frontier pickup is up nearly 45 percent this year. Ford plans a return with the Ranger as well.
Tacoma sales are up 4 percent this year through August, but its share of the midsize market has shrunk to 43 percent, from 51 percent a year earlier, amid the new competition. Toyota’s investment in capacity represents a bet that it can reclaim some of that share, and capture more of the segment’s growth, by increasing supply, even as the overall light-vehicle market begins to soften.
“Demand for trucks has grown exponentially,” Toyota Motor North America CEO Jim Lentz said in the statement. “By leveraging our manufacturing facilities’ availability and expertise, we can be nimbler and better adjust to market needs in a just-in-time manner.”
The Baja plant is currently stretched to its limit, having added a third shift in April 2015, executives at the plant said during a recent tour. The plant runs 24 hours a day Monday through Friday, plus two shifts on Saturday, then closes for maintenance.
Last year, Baja’s production was just over 82,000 trucks as the plant adjusted to the third shift and gradually increased output. Through August of this year, it has pumped out just over 63,000 units, according to Automotive News data.
