Toyota getting hit hard?

[2QuickZ's]

Toyota said to plan U.S. manufacturing changes

DETROIT -- Toyota Motor Corp. is planning significant changes to its U.S. manufacturing plants because of the rapid market shift away from trucks and sport utility vehicles.

A Toyota official speaking Thursday to The Associated Press says the company plans to shut down a San Antonio plant that makes the Toyota Tundra pickup for three months to reduce inventory and stop making pickups in Princeton, Ind. The Indiana plant will start producing the Highlander SUV.

The official asked not to be identified because a formal announcement from the Japanese automaker wasn't expected until later in the day.

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Toyota also plans to start producing the Prius hybrid in the U.S. for the first time at a plant it's building in Mississippi.

I can't wait to see the official announcement. I'm sure Toyota will come out of it okay, especially since they are a media darling, but it must be a little embarassing to have to shut a brand new plant down for 3 months to clear inventory of an "All new, best evar!" vehicle.

Link HERE

[Guest aatbloke]

I can't wait to see the official announcement. I'm sure Toyota will come out of it okay, especially since they are a media darling, but it must be a little embarassing to have to shut a brand new plant down for 3 months to clear inventory of an "All new, best evar!" vehicle.

Link HERE

You're going to find in North America that as fuel prices escalate, sales of trucks and SUVs will eventually plummet. This will affect all manufacturing companies of these types of vehicle, including Toyota.

Toyota are not impervious to economic changes, and this is just one business decision being made in light the market changes occurring as a result of soaring fuel prices. Other such decisions they have made have been to cover their bases in North America over the past decade as oil prices have risen. As a result, they've offered good B-segment and C-segment vehicles there during that time and an array of hybrid models for much of that period as well.

[CSpec]

Toyota stock is also at a 52-week low. Not a 52 year low like GM, but still not good.

[Guest aatbloke]

Toyota stock is also at a 52-week low. Not a 52 year low like GM, but still not good.

Hardly surprising, since all the of world's major market indices have fallen dramatically in the past nine months.

[2QuickZ's]

You're going to find in North America that as fuel prices escalate, sales of trucks and SUVs will eventually plummet. This will affect all manufacturing companies of these types of vehicle, including Toyota.

Toyota are not impervious to economic changes, and this is just one business decision being made in light the market changes occurring as a result of soaring fuel prices.

I agree with you. I posted this up because there are people on this site that somehow think the Big 3 should have seen this rapid market shift coming and didn't. Some even want to use this reasoning to run GM's current management out of the place. While there may be other good reasons to do that, this is not one of them. Even though I am not a Toyota fan, they do seem to do a decent job of predicting changes in the market and even they completely missed the boat on this one. They were caught flat footed with a new pickup plant and not enough capacity on the their small cars and hybrids. Nobody could have predicted this rapid of a market shift that is likely permanent.

[Guest aatbloke]

I agree with you. I posted this up because there are people on this site that somehow think the Big 3 should have seen this rapid market shift coming and didn't. Some even want to use this reasoning to run GM's current management out of the place. While there may be other good reasons to do that, this is not one of them. Even though I am not a Toyota fan, they do seem to do a decent job of predicting changes in the market and even they completely missed the boat on this one. They were caught flat footed with a new pickup plant and not enough capacity on the their small cars and hybrids. Nobody could have predicted this rapid of a market shift that is likely permanent.

I agree, and the odd thing is that in Europe, both GM and Ford have long had the same approach as the Japanese in predicting and quickly reacting to market changes. In North America, I think they have both just been blinded by producing more profitable SUVs for so long until the market for them bombed.

I have a lot of respect for both GM and Toyota, and I'm glad to see that GM are now lining up a very interesting array fo small cars for the North American market over the next couple of years. The potential growth for Lordstown with the Cruze and its intended derivatives is enormous.

[Robert Hall]

I agree with you. I posted this up because there are people on this site that somehow think the Big 3 should have seen this rapid market shift coming and didn't. Some even want to use this reasoning to run GM's current management out of the place. While there may be other good reasons to do that, this is not one of them. Even though I am not a Toyota fan, they do seem to do a decent job of predicting changes in the market and even they completely missed the boat on this one. They were caught flat footed with a new pickup plant and not enough capacity on the their small cars and hybrids. Nobody could have predicted this rapid of a market shift that is likely permanent.

The market shift away from bloaties started quite a while before the 2008 gas price spike, though...

[cletus8269]

interesting cause just this morning i was reading in motor trend about the in progress long term on the tundra double cab and they stated that the 5.7 was getting 13.8 mpg and it hurt filling up every 293 miles. after reading i though how in the world are they making it with on par or worse fuel economy as the big 3... but never mind everything is in check.

[siegen]

Toyota must be kicking themselves. Had they kept the Tundra smaller they could have leveraged its efficiency against the other full-size pickup trucks. They could have saved the money that they spent building the new factory and retooling all of their dealers to work on the larger Tundra. Now they are having to halt production for 3 months because sales are far below expectations. Well maybe Toyota did anticipate this, and also anticipates a return to full-size SUV's and trucks in the near future.

As a result, they've offered good B-segment and C-segment vehicles there during that time and an array of hybrid models for much of that period as well.

You mean subcompact and compact, right?

I have a lot of respect for both GM and Toyota

Toyota is the world's most respected company after all. :AH-HA_wink:

[thegriffon]

"Toyota Announces Changes in North American Production

—Prius to Be Built at Mississippi Plant—

Tokyo — TOYOTA MOTOR CORPORATION (TMC), with a long-term aim toward enhancing its ability to flexibly respond to rapid fluctuations in North American market demand and toward facilitating a stable supply of North American-made vehicles—announces the following changes to its North American production structure:

1) The currently under-construction Toyota Motor Manufacturing, Mississippi, Inc. (TMMMS), which was originally scheduled to produce the "Highlander" SUV, is to instead begin production of the "Prius" hybrid in the latter half of 2010.

2) Toyota Motor Manufacturing, Indiana, Inc. (TMMI) is to begin production of the Highlander in the fall of 2009.

3) Production of the "Tundra" full-size pickup truck, currently built at TMMI and Toyota Motor Manufacturing, Texas, Inc. (TMMTX), is to be consolidated at TMMTX in the spring of 2009.

The production of the Prius at TMMMS is to represent the second Toyota hybrid vehicle produced in North America, where Toyota Motor Manufacturing, Kentucky, Inc. (TMMK) already produces the "Camry Hybrid". In North America, strong demand for hybrid vehicles is expected to continue. Therefore, TMC, as a step toward a more stable North American production structure, intends to respond to customer needs by localizing hybrid vehicle production.

The introduction of the Highlander at TMMI and the consolidation of Tundra production at TMMTX are intended to increase efficiencies at both plants and to achieve steady plant-utilization rates.

Furthermore, as a response to a rapid fluctuation in truck-market demand, TMC announces that operation of the Tundra and Sequoia production line at TMMI, the Tundra production line at TMMTX and the Tundra and Sequoia engine production lines at Toyota Motor Manufacturing, Alabama, Inc. (TMMAL) is to be suspended for approximately three months from early August through to November. During this non-production period, employees are to mainly be assigned to participate in "continuous improvement"activities and training. TMC intends to use the opportunity presented by this period to cultivate its employees, with a long-term aim to further increase the productivity of its vehicle production plants in North America."

Toyota sales fell more than GM's last month, and I have to say, it seems GM has embraced the new market reality more than Toyota.

[thegriffon]

The definition of "spin":

"The truck market continues to worsen, so unfortunately we must temporarily suspend production. But this good news about production mix demonstrates our long-term commitment to our North American operations…"

[Drew Dowdell]

Best month EVAR in terms of reducing production line electricity usage!

[Guest aatbloke]

You mean subcompact and compact, right?

No, I mean B-segment and C-segment.

Toyota is the world's most respected company after all. :AH-HA_wink:

In my book, both Toyota and GM command a great deal of respect. To build and maintain a conglomerate of that size is no easy task.

[siegen]

You're going to find in North America that as fuel prices escalate, sales of trucks and SUVs will eventually plummet. This will affect all manufacturing companies of these types of vehicle, including Toyota.

Toyota are not impervious to economic changes, and this is just one business decision being made in light the market changes occurring as a result of soaring fuel prices. Other such decisions they have made have been to cover their bases in North America over the past decade as oil prices have risen. As a result, they've offered good B-segment and C-segment vehicles there during that time and an array of hybrid models for much of that period as well.

The reason we blast Toyota isn't because we have no clue about how fuel prices affect vehicle sales, or because we think Toyota has magical powers that protect them from problems that befall other companies. This business decision on Toyota's part is a result of their entering a lucrative market segment precisely at a time when that segment is starting to fall. I don't think anybody who follows world news or the automotive industry is surprised by the increase in gas prices. It has been a long time coming. Toyota knew it, but the profit was great enough to overcome the risk.

Toyota, like all Japanese automakers, started with small cars. I'm not sure what you're trying to get at, selling small cars has not been to "cover their bases", it is their bread and butter (as we call it) and always has been and always will be. That's how they broke into this market after all. Are you suggesting that Toyota is wise for not dropping their small cars when fuel prices were low?

No, I mean B-segment and C-segment.

Once again we are talking specifically about the NA market; and we don't take kindly to that wishy washy nomenclature around here. :AH-HA_wink:

In my book, both Toyota and GM command a great deal of respect. To build and maintain a conglomerate of that size is no easy task.

They would be respectful if they achieved that size without sacrificing ethical company behavior. If they had a guiding company principle that they stuck to, or truly wanted to help the environment. Toyota's sole purpose is to make money, improve profit margins, and increase market share; and it is obvious based on their company decisions and actions. You may say that all companies are like that, and it is true to an extent, they are in business to make money. But there's a big difference between a company that pushes something because they feel it is important and a company that pushes something because they know they can make money off of it. Why do you think Toyota joined Nascar? To advance their engine technology?

Toyota overworks their employees and buys from low-rate parts suppliers with unethical labor practices. We have read news articles about this and it makes you wonder, with Toyota's marketing and financial power, just how many other behaviors have gone unnoticed.

Toyota exploits markets that go directly against the image of the company they spend millions of dollars in advertising to achieve. Toyota advertises their hybrids, their environment-friendly image, and yet for every single hybrid they sell they also sell a full-size BOF truck or SUV. Toyota is a business after all, and exploiting the high profit margin full-size SUV/Truck market is a wise business decision, or at least it was. But it certainly does not gain Toyota any respect. If hybrids became unpopular, Toyota would drop them overnight too.