Toyota expands US truck output as light-truck demand grows
Toyota is stepping up US pickup and SUV production, aiming for a 60 percent light-truck sales mix in 2017 and ramping up capacity at key plants.
Toyota is increasing its US light-truck production, responding to sustained demand for pickups and SUVs and the shift in US consumer preferences away from passenger cars. The company expects these investments to bring its US light-truck sales mix to 60 percent in 2017, up from 52 percent the previous year, according to US Toyota brand chief Bill Fay.
US production replaces Japanese imports
Toyota's push for more US-built trucks began in the mid-1990s, when the strong yen made importing compact pickups from Japan uneconomical. By 1995, Toyota had stopped shipping compact trucks from Japan, relying on its NUMMI joint venture plant in Fremont, California to build the new Tacoma for the US market. NUMMI was scheduled to produce 150,000 Tacomas that year, up from 135,000 of the previous generation in 1994.
To further boost capacity, Toyota considered several options: increasing shifts at NUMMI, converting car plants in Kentucky or Ontario to truck production, or building new facilities. Any decision to add a third shift at NUMMI required agreement from unions, suppliers and General Motors, Toyota's partner in the plant at the time.
Full-size pickup expansion in Texas
The next major step came with Toyota's decision to double its full-size pickup capacity. The San Antonio, Texas plant, scheduled to come online in late 2006, was designed to produce 120,000 Tundra pickups annually at full capacity by 2008. This would bring Toyota's total US full-size pickup sales to around 230,000 units, targeting a 10 percent share of the segment, close to Toyota's overall US market share at the time.
At the start of this expansion, Toyota sold about 100,000 to 110,000 Tundras per year in the US. The San Antonio plant represented a clear commitment to localising production as the US light-truck market grew. According to company executives, light trucks made up only 47 percent of Toyota's US sales in the early 2000s, compared to 54 percent for the overall market.
SUVs and crossovers join the mix
By 2017, Toyota's US investments covered not just pickups but also SUVs and crossovers. Increased output of the Tacoma, RAV4, Highlander and the new C-HR crossover was intended to help Toyota close the gap with the industry average for light-truck sales, which had reached 64 percent of US vehicle sales. While Toyota did not expect to match the industry average, due to the continuing strength of its Camry and Corolla saloons, executives said the brand was comfortable maintaining a higher share of passenger cars than most rivals.
- NUMMI plant builds Tacoma pickup for US market
- San Antonio plant focuses on full-size Tundra pickup
- Expanded output of RAV4, Highlander and C-HR crossovers
Toyota's gradual, plant-by-plant approach to increasing US light-truck output has allowed it to respond to market shifts while maintaining a balanced product mix. The company continues to monitor demand and adjust its production footprint accordingly.
