By on December 5, 2009

Nice digs! Picture courtesy

Toyota had slammed hard on the brake when it came to capital expenditures. So hard that ToMoCo (and Sony) were rapped on the knuckles by the Japanese Ministry of Finance for hobbling Japan’s economy. Suddenly, Toyota starts pouring concrete and installing machinery again. Not because of newfound faith in the auto market in general. Two factors made them do it: The Yen has become so expensive that manufacturing in the USA is cheaper. And China is gobbling up cars faster than Toyota can make them.

According to the Nikkei [sub], a Toyota plant in the US and one in China will increase ToMoCo’s annual output capacity by 200,000 units before the Japanese 2010 fiscal ends on March 31, 2001. The construction will cost Toyota a little over $1b, depending on the vagaries of the greenback and its pegged follower, the Chinese Yuan. Here are the blueprints:

In the U.S., Toyota will resume construction of the Bluespring, Mississippi, plant, which had been halted in the beginning of 2009. The plant was originally planned for the Prius. According to the Nikkei, Toyota now wants to build some 100,000 Corollas there. Nummi’s loss will be Blue Spring’s gain. The Prius may follow, eventually.

In China, Toyota will re-start a likewise suspended joint-venture plant with China’s FAW in Changchun. Toyota is manufacturing a total of 10,000 vehicles a year at another joint-venture plant in Changchun. Not enough for the voracious Chinese market. The new facility is expected to have an annual output capacity of 100,000 units. No decision yet what exactly will be built there.

The Nikkei pegs Toyota’s global annual production capacity at roughly 10 million units. With the group’s worldwide sales forecast slightly above 7 million units in 2009, there is way too much excess capacity.

Toyota plans to cull capacity by 1 million units before March 31 2010 by suspending some production lines in Japan and the U.K. Win some, lose some.

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2 Comments on “Planting Season At Toyota...”

  • avatar

    Somehow ironic that the response to being singled out for damaging the Japanese economy is a response of adding foreign capacity so as to offshore production (with a presumed loss of Japanese jobs).

  • avatar

    100k Corollas in Mississippi isn’t going to cut it. The last 12 months, and they were not pretty, Toyota sold over 360k Corolla/Matrix in North America. The current sales numbers, still terribly depressed point to about 400k adjusted sales figure.
    Cambridge can only make about 230k.  Making the rest in Japan doesn’t work either:  the high yen, custom duties and shipping costs will make the meager profit of $1500/car quickly disappear.

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