Toyota opts to build crossover instead of Corolla at Ala. JV plant

Toyota Motor Corp. has abandoned plans to build Corolla sedans at a new joint assembly plant it is building in cooperation with Mazda in Huntsville, Ala., and instead will build an as-yet-unannounced crossover there.

In an announcement Wednesday morning, Toyota said the shift "is in response to changing market demands and a growing consumer appetite for light trucks."

The new crossover is likely to be shown to dealers at a private meeting scheduled for September in Las Vegas.

Through the first half of this year, U.S. sales of the Corolla -- the market's second best-selling compact car after the Honda Civic -- are down 5.3 percent to 152,868, compared with a segment that is down 16 percent. The car finished 2018 down 7.7 percent to 303,732. Corolla sales peaked in 2006 at 387,388 vehicles, and last finished up year-over-year in 2016, when it recorded 378,210 sales in the U.S, according to the Automotive News Data Center.

Toyota and Mazda late last year broke ground on the $1.6 billion plant, named Mazda Toyota Manufacturing U.S.A. Production is slated to begin in 2021. Capacity is expected to be 300,000 vehicles a year, and it will create up to 4,000 jobs. Corolla production will continue at Toyota's assembly plant in Blue Springs, Miss.

Toyota North American CEO Jim Lentz, when asked in May whether the automaker might have to change its strategy at the plant given waning U.S. demand for sedans, said it didn't need to at the time, but he left the door open. "When we build plants, it is a long-term investment," he said. "If you look at most of our plants, they have built one or two different models over the lifetime. So we will continue to make adjustments, as necessary, based on where the market takes us."

This is not the first time Toyota has changed its North American Corolla production plans in recent years. The company had planned to build them at a new plant in Guanajuato, Mexico. However, after it broke ground, Toyota in 2017 decided to build Tacoma pickups there instead.

Mazda, in an emailed statement, said its plans to build a yet-to-be identified crossover new to North America at the plant have not changed.