Toyota Motor Corp. addresses the colossal U.S. truck market and its own need for more capacity with plans to build an $800 million pickup truck plant in San Antonio, TX.
The No.1 Japanese auto maker plans to produce 150,000 next-generation Tundra pickups annually at the plant, which will be its sixth in North America. The next-generation truck reportedly will be larger, in order to better compete against the dominant Big Three entries and the new Nissan Titan, which goes on sale in December (see story, p.38).
Toyota says it plans to continue production of the Tundra at its Princeton, IN, facility, where it currently builds the truck at a rate of 100,000 units annually on the same line as the Sequoia fullsize SUV. The auto maker recently added Sienna production to a new line at Princeton, and Sequoia can be built on either line.
The forthcoming Texas plant adds one more layer of flexible manufacturing for Toyota. And Tundra likely represents just the first phase of production at the Texas site. The auto maker has a history of starting small and adding new vehicles and lines over time.
Toyota Motor Texas Mfg. Inc. is slated to begin production in 2006 and employ some 2,000 workers. Site preparation and construction begins later this year. Texas beat out Arkansas and several other states for the plant. Oh, and Texas is the largest pickup truck market in the U.S.
The state of Texas and city of San Antonio ponied up a combined $133 million in incentives for the plant, which is lower than the current industry trend. In exchange, Texas gets a $78 million payroll with the $20/hour jobs being some of the best paying in the area.
The addition of the Texas plant and another new facility in Tijuana, Mexico, slated to begin building Tacoma compact pickups in 2005, will boost Toyota's North American production capacity to 1.65 million units annually.
More capacity should help the auto maker achieve its aggressive growth goals of 15% market share in the U.S. by 2010. Toyota last year captured 10.4% of the market. Toyota also seeks a more even balance in car and truck sales to better reflect the U.S. market. Last year, Toyota sold 985,835 cars and 770,292 trucks, for a 56/44 split in favor of cars.
Meanwhile, Toyota reports a fiscal third quarter 2002 profit of ¥216 billion ($1.8 billion), almost doubling the ¥111.4 billion ($931.3 million) earned in like-2001.