R-34
02-18-2004, 08:36 PM
SAN FRANCISCO -- Toyota is beginning to contemplate where to build its next plant -- or plants -- in North America.
While most automakers see the U.S. market as overcrowded, Toyota sees long-term growth potential beyond expanding its annual capacity to 1.66 million cars and trucks by 2006. President Fujio Cho noted last week that the U.S. population is expected to double by 2050.
But as Toyota, Lexus and Scion brand sales continue to grow -- they captured more than 11 percent of the U.S. market last year -- the automaker will need more plants to sustain the fact that 62 percent of North American sales are vehicles produced in North America.
"It would be wrong to say we are already looking . . . but I think this is just about the time that we have to start thinking about what is next," Yoshimi Inaba, Toyota Motor Corp. senior managing director in charge of the Americas, said in an interview last month.
Dennis Cuneo, senior vice president of Toyota's North American holding company, reiterated last week that "no specific search" has begun.
The location and timing of Toyota's next plant will be driven by the company's sense of what products are most needed for the United States, Canada, Mexico and potential export markets, Inaba said. Toyota may wish to build a plant within easy access of suppliers that make parts for similar Toyota vehicles -- such as Camrys made in Kentucky or pickups in Texas and Indiana.
Access to a deep and largely untapped labor pool would be another key factor in the decision, said David Cole, director of the Ann Arbor-based Center for Automotive Research.
"I think they will be looking for a large pool of educable workers where they (Toyota) would be the highest-paying employer," Cole said.
A leading candidate would certainly be Arkansas, which has no auto assembly plants.
Toyota was all set to put its new Tundra full-size pickup plant in eastern Arkansas within convenient reach of its Alabama V8 engine plant and Kentucky parts plants that feed the existing southern Indiana truck plant, insiders say.
But Toyota's marketing arm persuaded the company to put the new plant in Texas, where one in eight full-size pickups is sold.
Sales executives hope that putting a truck plant in the heart of pickup country will inspire Texans' pride -- and counter the powerful loyalty that many of them feel for their F-150s, Silverados, Sierras and Rams.
Toyota has less than 5 percent of the U.S. full-size pickup market, and less than 3 percent in Texas.
Toyota is also building a truck-bed and compact pickup plant in Tijuana, Mexico, and an engine block plant in Jackson, Tenn.
Its North American manufacturing headquarters south of Cincinnati and technical center in Ann Arbor are being expanded, as well.
Building vehicles and buying parts in the countries where they are sold -- Toyota spends $19 billion a year on North American parts, goods and services -- not only helps with marketing but serves as a natural hedge against a strong yen.
In the last year, the yen has ranged from about 120 to 105 per dollar.
Likewise, it helps to dampen criticism that the Japanese government is weakening the yen on Toyota's behalf.
But the company still faces the question of what to build next.
While Toyota executives refuse to speculate on plans for future vehicles or plants, a senior official told the Free Press that Toyota's medium-term plans could include even more pickup capacity or investment to meet projected demand for hybrid gasoline-electric-powered vehicles.
"I think hybrid vehicles are going to set the industry on its ear," the official said. "And the American consumer is really going to see they can have their cake and eat it, too, with SUVs that have Corolla-type gas mileage and incredible emission improvements and yet great performance."
Plants dedicated to Toyota's luxury Lexus brand or the Scion marque aimed at young Americans could also be considered.
Late last year, Toyota started making the Lexus RX330 sport-utility at its plant in Cambridge, Ontario. Previously, Lexus cars and SUVs were made only in Japan.
The Canadian plant is so far meeting the exacting standards of the brand, which bills itself as selling the "relentless pursuit of perfection." But Inaba isn't keen on building similar Lexus and Toyota models on the same line. It is too hard, he said, to shift back and forth between the standards of the two brands.
In a sense, the decision is getting harder, he said, because the core of Toyota's lineup is already being made in the United States and Canada.
"There's no good chunk of vehicles left," Inaba said. "You have covered Camry, Corolla, Tacoma and now Tundra, Sequoia. So there's nothing much left."
Car-based crossovers, such as the Toyota Highlander, are one such hole.
But whatever Toyota announces next is not likely its last, noted Cole.
"It would be a mistake to think that Toyota is going to stop with one (more) plant," he said.
detroit free press.
While most automakers see the U.S. market as overcrowded, Toyota sees long-term growth potential beyond expanding its annual capacity to 1.66 million cars and trucks by 2006. President Fujio Cho noted last week that the U.S. population is expected to double by 2050.
But as Toyota, Lexus and Scion brand sales continue to grow -- they captured more than 11 percent of the U.S. market last year -- the automaker will need more plants to sustain the fact that 62 percent of North American sales are vehicles produced in North America.
"It would be wrong to say we are already looking . . . but I think this is just about the time that we have to start thinking about what is next," Yoshimi Inaba, Toyota Motor Corp. senior managing director in charge of the Americas, said in an interview last month.
Dennis Cuneo, senior vice president of Toyota's North American holding company, reiterated last week that "no specific search" has begun.
The location and timing of Toyota's next plant will be driven by the company's sense of what products are most needed for the United States, Canada, Mexico and potential export markets, Inaba said. Toyota may wish to build a plant within easy access of suppliers that make parts for similar Toyota vehicles -- such as Camrys made in Kentucky or pickups in Texas and Indiana.
Access to a deep and largely untapped labor pool would be another key factor in the decision, said David Cole, director of the Ann Arbor-based Center for Automotive Research.
"I think they will be looking for a large pool of educable workers where they (Toyota) would be the highest-paying employer," Cole said.
A leading candidate would certainly be Arkansas, which has no auto assembly plants.
Toyota was all set to put its new Tundra full-size pickup plant in eastern Arkansas within convenient reach of its Alabama V8 engine plant and Kentucky parts plants that feed the existing southern Indiana truck plant, insiders say.
But Toyota's marketing arm persuaded the company to put the new plant in Texas, where one in eight full-size pickups is sold.
Sales executives hope that putting a truck plant in the heart of pickup country will inspire Texans' pride -- and counter the powerful loyalty that many of them feel for their F-150s, Silverados, Sierras and Rams.
Toyota has less than 5 percent of the U.S. full-size pickup market, and less than 3 percent in Texas.
Toyota is also building a truck-bed and compact pickup plant in Tijuana, Mexico, and an engine block plant in Jackson, Tenn.
Its North American manufacturing headquarters south of Cincinnati and technical center in Ann Arbor are being expanded, as well.
Building vehicles and buying parts in the countries where they are sold -- Toyota spends $19 billion a year on North American parts, goods and services -- not only helps with marketing but serves as a natural hedge against a strong yen.
In the last year, the yen has ranged from about 120 to 105 per dollar.
Likewise, it helps to dampen criticism that the Japanese government is weakening the yen on Toyota's behalf.
But the company still faces the question of what to build next.
While Toyota executives refuse to speculate on plans for future vehicles or plants, a senior official told the Free Press that Toyota's medium-term plans could include even more pickup capacity or investment to meet projected demand for hybrid gasoline-electric-powered vehicles.
"I think hybrid vehicles are going to set the industry on its ear," the official said. "And the American consumer is really going to see they can have their cake and eat it, too, with SUVs that have Corolla-type gas mileage and incredible emission improvements and yet great performance."
Plants dedicated to Toyota's luxury Lexus brand or the Scion marque aimed at young Americans could also be considered.
Late last year, Toyota started making the Lexus RX330 sport-utility at its plant in Cambridge, Ontario. Previously, Lexus cars and SUVs were made only in Japan.
The Canadian plant is so far meeting the exacting standards of the brand, which bills itself as selling the "relentless pursuit of perfection." But Inaba isn't keen on building similar Lexus and Toyota models on the same line. It is too hard, he said, to shift back and forth between the standards of the two brands.
In a sense, the decision is getting harder, he said, because the core of Toyota's lineup is already being made in the United States and Canada.
"There's no good chunk of vehicles left," Inaba said. "You have covered Camry, Corolla, Tacoma and now Tundra, Sequoia. So there's nothing much left."
Car-based crossovers, such as the Toyota Highlander, are one such hole.
But whatever Toyota announces next is not likely its last, noted Cole.
"It would be a mistake to think that Toyota is going to stop with one (more) plant," he said.
detroit free press.