Toyota Restarts Plant Contruction As Currency Worries Outweigh Falling Demand

Cammy Corrigan
by Cammy Corrigan
toyota restarts plant contruction as currency worries outweigh falling demand

Asiaone Motoring reports that Toyota are now pushing forward on their constructions of plants in the United States and China which had previously been put on hold. It should come as no surprise that part of the reasoning behind this decision is to meet growing demand in China. More importantly, Toyota needs to protect itself from the strong yen, a consideration that now apparently outweighs weakness in the US market. The report says that Toyota is expected to invest and additional 100 billion yen (about $1.1b) to get these plants completed. Although these plants will increase capacity by 200,000 units, Toyota plan on halting production on lines in Japan and the UK, as the firm must still reduce capacity by 1 million units in order for this investment to work. Though the move is a clever one, it highlights the enormous pressure the world’s number one automaker finds itself under: overcapacity is bad enough, but when so much of its production is based in Japan, it deal with reduced production while paying for expansions in cheaper production zones. The upside? This plan could lead to US production of the Prius at the under-construction Mississippi plant sooner than expected.

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  • Mr Carpenter Mr Carpenter on Dec 07, 2009

    Seems to me that Toyota is actually having to row instead of coast. It'll make them better, smarter, and more competitive. Or it will be the beginning of their demise before they even reached a zenith of "top dog" in auto sales globally. I suspect that they are smart enough to have it be the former rather than the latter.

  • SkiD666 SkiD666 on Dec 07, 2009

    So if the meme that all cars built in Japan are better quality than those built in China or the US, where does that leave Toyota? Making decisions based on profit rather than continuing to guard their reputation.

  • Richard Moye Richard Moye on Dec 07, 2009

    so let me get this straight... Toyota is going to outsource Japanese jobs to the U.S.? they terk er juuaabs!!!

  • Psarhjinian Psarhjinian on Dec 07, 2009
    So if the meme that all cars built in Japan are better quality than those built in China or the US, where does that leave Toyota? The meme is wrong. The reason Chinese cars might be less reliable is because they're being badly designed, assembled and/or using substandard parts and/or QA processes and/or have poor warranty and service support. This has nothing to do with them being Chinese. Similarly, Toyota has been cranking out very reliable products in the US for some time, as have other marques. I know the "made in Japan/Germany" meme is used to make fans of a given brand feel better, but the statistics absolutely do no bear out a direct relationship.
    • Also Tom Also Tom on Dec 07, 2009

      I spend my days driving Toyotas over a 14 state area. They don't excite me personally but my experience tells me that what you have stated is correct.