By on August 8, 2014

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Toyota is not going to be expanding any plants in the United States, even as they are forced to absorb further production of the Toyota Camry as their assembly deal with Subaru winds down.

According to Just-Auto, Subaru’s Indiana facility built just under 100,000 Camrys in 2013, and the Georgetown, Kentucky plant that current builds the bulk of North American Camrys, is the busiest in the United States, turning out over 504,000 vehicles last year, with the Camry accounting for nearly 350,000 units.

With Avalon sales declining and the Venza reportedly being axed, there should be an additional 50-60,000 units of capacity. Even so, that leaves a shortfall, and Toyota is unlikely to increase imports of the Camry – which is built in Japan as well – increase beyond the handful it currently brings in.

The solution for Toyota will be to make better use of their current manufacturing footprint, through increased efficiencies. If Toyota wants to hang on to their “best-selling car” bragging rights, they’ll need to find some solution to the production deficit that appears to be looming.

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68 Comments on “Toyota Putting The Brakes On Further Capacity In America...”


  • avatar
    beachjesus

    “Toyota is unlikely to increase imports of the Camry – which is built in Japan as well – increase beyond the handful it currently brings in”

    This is incorrect – every Camry sold in the U.S. is made in the U.S.

  • avatar
    schmitt trigger

    Toyota may build appliance vehicles, but their manufacturing system is simply the best anywhere, used as a model and a goal for every manufacturing facility.

    It is widely studied and emulated. And not just within the auto manufacturing sector.

    If anyone would be capable of making this happen, it would be Toyota.

    • 0 avatar
      tresmonos

      Hyperbole.

      • 0 avatar
        Phillin_Phresh

        How do you mean, tresmonos? While I have a distaste for hyperbole, I have to agree with schmitt that Toyota has an impressive and refined production system (TPS) that has been copied, studied, and imitated by countless firms.

        Alan Mulally was quoted in 2006 saying that Toyota had “finest production system in the world”. He actually went to Japan in the early ’90s to study the TPS for application on the 777 assembly line. He borrowed again from the TPS playbook while at Ford; initiating quality, fuel efficiency, and a global product line. This was a marked departure from the rigid bureaucracy at Ford that came about from Taylor’s efforts at industrial engineering.

        • 0 avatar
          tresmonos

          The only thing Mulally did was stream line trim level options and reduced manufacturing complexity.

          Quality initiatives done at Ford were based on quality test fleets of preproduction cars, which has nothing to do with TPS.

          Saying that Taylorism exists at Ford tells me you’re not familiar with it’s internal workings. We are talking about a company with the majority of it’s manufacturing footprint still in first world countries. Taylorism is illegal in most of Ford’s manufacturing facilities. The only inefficiency I can see that Ford has in its production system is the work rules of each Union local. Aside from that, most final assembly plant is as efficient as it’s bones allow it to be. Plant culture is still harsh, but even that has drastically changed and that mostly occurred during the Way Forward plan.

          Speaking of which, most of the consolidation of platforms and assembly plants were already in motion before Mulally stepped in. Joe Hinrichs and Linda Cash are probably the people you should be researching.

          Ford had toyed with global platforms in the past. Sh1t got real with the launch of the Focus and I suppose Mulally is responsible for this. But that doesn’t represent TPS, FPS or any production systems. That’s efficiency in your product development resources.

          Source: I worked for Ford and now I work for a tier 1 Japanese supplier.

    • 0 avatar
      DenverMike

      The Tacoma has quality issues traced back to San Antonio management.

      • 0 avatar
        Big Al from Oz

        @DiM from Winnipeg,
        I have studied Toyota’s San Antonio plants workings.

        Do you have a link to substantiate this?

        There are management issues at all plants, worst of all as tresmonos pointed out due to unionised work to rule. Work to rule would impact profits through the lack of flexibility more with the guys on the floor.

        Then when production needs to be stepped up work to rule can translate into quality issues.

        We are studying processes and the lack of flexibility in our workforce via a reduction in what is described as ‘brown rules’ rather than red tape.

        So, yeah provide a link, as this may give me some ideas at work.

        Quality assurance and management is very significant in aviation.

        • 0 avatar
          DenverMike

          Here’s the article, BAFO. You even left comments on it. All lies. You’re such an idiot. Now you’ve gone beyond trolling… Do you REALLY expect anyone to believe you’re a rocket scientist?????

          news.pickuptrucks.com/2014/04/are-robots-behind-perceived-drop-in-toyota-tacoma-build-quality.html

  • avatar
    bumpy ii

    The obvious answer here would be to cut back on fleet sales.

    I would think the lost Avalon and Venza output would be mostly taken up by the ES350’s move to Georgetown?

    • 0 avatar
      APaGttH

      Toyota has made it clear they want to hold on to the top selling title – if they wind back fleet sales, although better for consumers due to higher resale long term and lower TCO (the 60Kish Camrys hitting rental lots a year will eventually catch up with the market) the Accord would become the top selling sedan.

      For whatever reason, Toyota leadership wants that top selling crown.

      • 0 avatar
        Luke42

        “Better for consumers” depends on what you mean.

        It’s really better for the first owber, worse for the second owner.

        Boring cheap reliable used cars aren’t really anyone’s idea of fun, but they’re a real boon to the household budget of the second, third, and even fourth owner of the now-used car.

        But, yeah, the person who bought it new and ate the steeperst part of the depreciation curve might eat more or less of it.

    • 0 avatar
      highdesertcat

      bumpy ii, cutting back on fleet sales of the Camry would reduce all those rentals that are released as program cars every year to buyers who cannot afford to buy brand new.

      Case in point, my brother in Palos Verdes bought a 1-year old Program Camry for his oldest daughter recently, just as a throwaway vehicle for her daily commute to and from work, up and down I-5. He paid $12,500 for a Camry that would have retailed for $26K if purchased brand new, with all the options, and it only had 15K miles on it.

      I do believe that Toyota can sell every Camry they make, if not brand new, than as a program vehicle from a rental company in the “previously owned” category.

      • 0 avatar
        APaGttH

        Yikes.

        That GM W-body mid 2000’s grade depreciation.

        • 0 avatar
          highdesertcat

          APaGttH, and there were at least 50 to choose from at that price at just this one dealership!

          Program cars are the way to go if someone wants to buy a late model used car for not much money. I bought an ’88 Towncar from Budget in Tucson, and turned it within a month for $2K clear profit.

          A friend of mine bought a late model Taurus with all the toys from Hertz for not much money. Drove it until his son left home and sent the car away with him.

          But once they’re gone, so are the good deals.

          Don’t look at it as depreciation. Look at it as a liquidation. The Rental Cos take all the depreciation they can on their vehicles, and then liquidate them to recoup the remainder. If they sold it for more, they’d have to pay tax on the profits.

      • 0 avatar
        jimmyy

        That is surprising … I just traded a 12 Camry LE Hybrid that I owned for 2.5 years. It had 25K miles on it. I paid $23,500 when it was brand new, before taxes and registration. The trade in was $20,100. That puts the cost at $113 per month.

        I just checked Hertz car sales … rental 2013 Camrys with 20K miles are 17K … a gas model. The 12.5K was an amazing deal.

        I keep reading about all the fleet Camrys in rental lots on TTAC … but I have rarely seen one as a rental. Clearly, Detroit, Hyundai and Nissan are what I am seeing … with a heavy overweight to Detroit.

        • 0 avatar

          You did not see a Camry as rental? really? I can’t count how many times I got a Camry as rental, I have a picture from August 2000 in Florida with a rental Camry so you can imagine they started with this long time ago.

        • 0 avatar
          VCplayer

          Uh, even Toyota’s own numbers show a lot of Camrys going to fleet.

          That isn’t an all bad thing. Rentals play an important role in exposing potential customers to different kinds of vehicles.

      • 0 avatar
        chicagoland

        I don’t believe that a Camry with an MSRP of $26K would sell that cheap a year later. $12,500 will maybe get a used base Versa, but no Camry.

        • 0 avatar
          RobertRyan

          Interesting the “Capitalist ” US bailed out bankrupt Auto Companies, during the GFC using public money. Not something you would see in those “Socialist” economies

        • 0 avatar
          highdesertcat

          chicagoland, I don’t know what you envision former rental cars should look like, but there are plenty of opportunities in many big cities to buy them cheap, especially the ones with nicks, dents, scrapes, dings and scratches on them. Rental Cos don’t have them fixed. The liquidate them and recoup their break-even costs.

          And if someone is going to use it for the daily commute, why not get something that’s already dinged up?

          A used Camry, for instance, comfortably sits 5 people of various physical dimensions, and is ideal for the ride-sharing commute, so common in Southern California these days.

          Who cares if it has dings and scratches already? One less thing to worry about.

          • 0 avatar
            tuffjuff

            @hdc

            Thank you for clarifying. There’s a HUGE difference between a slightly used vehicle that when new was 26k but now used is 20k, and one that’s less than half the retail value, when used. Your example is good to know but that detail is important as without it you’re implying you can find 2 year old cars at less than half price. That simply doesn’t exist.

          • 0 avatar
            highdesertcat

            @tuffjuff, sorry, it must have been a senior moment on my part. I knew what I wanted to communicate, but it turned out it was too brief and not at all concise, nor to the point.

            My brother who bought that used rental Camry called me after he read my comment to let me know I should explain further since some readers assumed that what he bought was a showroom-quality piece when in fact it had dings and scratches on it.

            But the $12,500 for the vehicle is valid, plus tt&l, transfer fees, CA doc fees transferring a commercial vehicle to private ownership, etc.

    • 0 avatar
      SpinnyD

      Nope, Lexus won’t affect the current lines, It’s getting a separate line for ES350 production.

  • avatar
    SCE to AUX

    Or maybe they expect a market correction and so more capacity won’t be needed.

    • 0 avatar
      CJinSD

      Probably a combination of an economy that the regime will have a hard time propping up through November and lawless new UAW tactics. I wouldn’t invest in this country’s future.

      • 0 avatar
        mike978

        I know what you mean, this administration has been hell for corporate profits and stock market performance!

        • 0 avatar
          chicagoland

          So that is why the market broke a record recently? If everything was so bad, then the Dow would still be below 9000, as in 2009. And we’d have over 10% unemployment.

          We will never be a “one party system” as Fox News demands, [and greenies]

          • 0 avatar
            CJinSD

            The market value must have nothing to do with funneling 65 to 80 billion interest-free dollars to cronie institutional investors every month. And the unemployment rate must be disconnected from the labor participation rate. You must be smart.

          • 0 avatar
            mike978

            The labor force participation rate is about 2% below the peak under Bush Jr. It start to fall before January 2009. Also QE is about $25b a month now and continuing to fall. I recall some saying iit would lead to rampant inflation, umm.

            Your financial acumen seems to be equal to your patriotism!

            P.s. didn’t you used to work for a big wall street firm. pot kettle black.

          • 0 avatar
            JD23

            Are you arguing that the stock market and profits of the Fortune 500 are still inextricably tied to the health of the US economy? Of course, there is some relationship, but the market has become an increasingly poor proxy for the health of the domestic economy as corporations have become multinational and financial markets have been driven by the Fed’s monetary policy.

            By your measure, the Fall of 2007 was the economy’s second strongest period in recent history.

          • 0 avatar
            highdesertcat

            JD23, for me the Fall of 2007 WAS the economy’s second strongest period in recent history.

            That’s when I started to divest and sold off at the top. Sure glad I did because what followed after the Summer of 2008 was not pretty.

          • 0 avatar
            CJinSD

            By about 2% below the peak under Bush, you mean 3.5% less than the peak under Bush(62.9 v. 66.4). What you don’t know is that this actually reflects a 5.3% reduction in the labor participation rate. Congratulations on your ability to hide from what your ideology is doing to the country, and the world for that matter. It will be that much funnier when it catches up to you, just as it caught up with all the short-term overachievers of early 20th century progressivism in Europe.

          • 0 avatar

            Yeah, world is on fire. Ukraine is mulling cutting gas and oil supplies to Europe, Moscow has its back against wal – not a good sign from historic perspective, Israel under attack and danger of elimination, antisemitism in Europe coming back strong, China threatening war against neighbors and gaining influence in the world at US expense. But yes stock market is on fire too. Until recently. World is changing if you did not notice and in not positive way.

  • avatar

    “and the Venza reportedly being axed”

    What?!? I see these things all over the freaking place. Why is this being axed?!? It was like one of three interesting vehicles Toyota makes.

    • 0 avatar
      bumpy ii

      Everyone buys RAV4s and Highlanders instead.

    • 0 avatar
      danio3834

      Maybe you live near the assembly plant?

      Toyota has only been able to move about 40k units a year average, which is roughly about the volume the Dodge Magnum did.

    • 0 avatar
      greaseyknight

      And I see Dodge Magnums all the time, but I live in MKE where Chargers are as common as dirt. The demographic makes a huge difference in what vehicles you see on the road.

    • 0 avatar
      highdesertcat

      EChid, the Venza is a price-anomaly, costing way more than it should. The Avalon is suffering from the same disease, being priced to whatever the market will bear. Toyota would sell a lot more of both if they could bring down the price on each.

      The Venza, basically a Camry stationwagon on steroids, while a wonderfully capable vehicle in V6/AWD trim, should be sold for no more than $30K, even if only one trim is available.

      The Avalon is way overpriced for a vehicle in that class that is basically a stretched Camry.

      In case of the Avalon, the Chrysler 300 at $25K is a much better deal, with a more powerful V6 and a better transmission than the Avalon.

      In the case of the Venza, the Jeep Grand Cherokee Laredo 4X4 with the “E” package can be had for less, is bigger, more comfortable. My best friend did just that – started looking at a Venza AWD, came home with a Grand Cherokee Laredo 4X4, and paid less for the Grand Cherokee than he would have paid for the Venza.

      • 0 avatar
        turboprius

        Price was the only thing that stopped us from buying one. And we were going to get the four-cylinder, FWD XLE if we got one (XLE, because mom’s sunroof).

        My aunt has a 2009 V6. It has about 100K on it now, and I’ve ridden in it a few times. Improve the interior materials, and you’ve got a Lexus. What a great car. But the Highlander is just more practical, I completely agree.

        • 0 avatar
          highdesertcat

          turboprius, we are still very happy with our 2008 Japan-built Highlander Limited AWD which now has well over 85K miles on the clock but still does daily duty as my 17yo grand daughter’s daily ride. It has been a flawless vehicle for us. No muss. No fuss. Better ingredients, better pizza!

          As opposed to the American built 2009, 2010 and 2011 Highlanders purchased by my wife’s sisters which were plagued with recalls and glitches. What a nightmare, for them.

          They no longer drive those Highlanders but traded them for 2014 Grand Cherokees, only to be bogged down by all the glitches in those vehicles, as opposed to the flawless ownership we enjoy with my wife’s 2012 Grand Cherokee.

          So, these days, it’s a crapshoot when buying a new car and a lot has to do with where it is made and who supplies the parts.

          We will be going through all that anxiety again as we prepare to buy our 2015 Sequoia for my wife, and trade her Grand Cherokee in on it. More than likely the Sequoia will be the last vehicle we’ll buy for my wife because we’re getting up there in age.

          But at least we’ll be an all-Toyota family again if we count my 2011 Tundra, the 2008 Highlander and the 2015 Sequoia. Oh, what a feeling!

          • 0 avatar
            DeadWeight

            I will caveat what I’m about to write in deference to what Tresmonos has to add/correct, but IMO and based on assembly methods & facilities I’ve seen, end quality & reliability has never been less correlated to point of assembly, versus quality of OEM supplied parts.

            There are many Skodas with higher quality assembled in the Czech Republic than VWs in West Germany, and Honda CRVs assembled in Ohio that rival or best similar vehicles assembled in Toyota City.

            I think the only exception I’d make is for paint quality, which inherently correlates with the age/sophistication of the factory paint prep & spray application facilities.

          • 0 avatar
            jimmyy

            I had an American made 2011 Highlander that my brother bought from me. He still owns it. It has 80,000 miles on it. The only repairs are a new set of tires, and the driver side sun visor broke … $200.00 repair. The vehicle does not even have a rattle, even though it has been on the road since late 2010.

          • 0 avatar
            turboprius

            My mom’s RAV4 was built in Canada, and has been flawless. Do you know if the 2015 Sequoia is going to have updates (like the Tundra got for 2014)?

            And something else: In the real world, I’m starting to feel old. Most of my peers have their permits (my friends have been lazy), and some of the older ones will be getting their licenses this year. I’m having to shave now, and a good amount of the things I did as a kid (ex, play Webkinz), no one does anymore. But when one of the B&B’s great grandchildren is older than me, I feel really young. She’s lucky to have a Highlander! I’d take a Highlander like you mentioned over any Jeep or lifted truck any day.

          • 0 avatar
            highdesertcat

            turboprius, the Highlander doesn’t belong to my grand daughter — we just let her use it because, until next school year starts, she is still living with us in New Mexico, like for the past three years.

            It’s a long story but ttac is not the venue for it.

            She starts 12th grade in El Paso, TX, later this month and then will attend UT El Paso after she graduates next year. It’s kinda convenient since her mom (my daughter) works at UTEP.

            We haven’t collectively decided yet what we are going to do for her transportation needs because her mom gets a car from the University to travel in during the work week and that frees her mom’s car for my grand daughter’s use.

            About the 2015 Sequoia; we know nothing! I placed the order with the Toyota/Lexus dealership in El Paso where we bought the Highlander AND the Tundra because we are repeat customers, and they know me, and I know the entire sales staff there.

            I told the salesmanager to let me know what was coming in when the store got confirmation from Toyota, so my wife I could pick one out, as long as it wasn’t black or white.

            They know I’ll buy, and they want that Grand Cherokee trade in!

            In my part of the country, kids get their learner’s permits at age 15 and a half, take driver’s Ed in school, and get their drivers license at age 16.

            It’s a necessity here — no public transportation and great distances between watering holes.

        • 0 avatar
          dtremit

          The interior is weirdly basic given the pricing and market position of the car. Incredibly cheap materials.

          I’m sort of surprised Toyota hasn’t been able to do better with it — though given that the Edge and Murano are both all-new next year, I’m not shocked they’d kill it off.

      • 0 avatar
        LectroByte

        Smells like BS, I’m lucky if I get a rental car with less than 20k on the odometer these days, can’t imagine someone giving one away for $10k under wholesale with only 15k on it.

        • 0 avatar
          highdesertcat

          LectroByte, in the big cities, like LA, there are dealerships who sell the former rental cars for cheap.

          Often these are not the pristine used cars that demand the big bucks, but former rentals with dings, nicks, dents and scratches that are otherwise mechanically sound.

          Rental Cos don’t send out their damaged rentals to be fixed. They liquidate them and there are plenty of buyers, especially on the West Coast that will scoop them up.

          • 0 avatar
            LectroByte

            Hey, High Desert Cat, my mistake then, I read the post as you implying that Camry’s were depreciating so fast you could pick up a used one very cheap like it was a Chevy Spark or something. If it’s been wrecked severely (salvage title?), well that’s kinda different. My apologies for any confusion on my part.

  • avatar
    J.Emerson

    So I guess that plans to build the Prius in North America are dead in the water now? If they have excess capacity anywhere, they’ve probably got some at the Mississippi plant. They were going to build the Highlander there, then the Prius, and finally the Corolla. So now the Mississippi plant is only building Corollas for North America, in addition to the Ontario operation. It’s funny, the last time I was at a Toyota dealer in East Alabama the Corollas all had Canadian VINs. I hope they still decide to bring Prius production here at some point and do it at the Mississippi facility.

  • avatar
    jimmyy

    I can understand Toyota’s decision. They are worried about the union friendly Democratic party.

  • avatar
    Volt 230

    Or just build another factory in Mexico, like everyone else seems to be doing these days.

  • avatar
    DrGastro997

    Gotta love what Toyota exec Kodaira said about putting the brakes on production and why:

    “Building a new plant is a rather simple solution because people with money can do it, but not building new plants can stimulate wisdom and new thoughts.”

    That’s productive leadership!

  • avatar
    PentastarPride

    Maybe this is a good thing, because I am getting fatigued seeing mostly Toyotas on the road, and Camrys at that. It makes the commute or a road trip very boring, as I like to see the different vehicles on the road. Seems like there’s not much other than Toyota Camry, Tundra, Lexus IS, Siennas, an army of Prii, a few Lexus RX, another convoy of Camrys, a Highlander here and there, maybe a Scion.

    Fortunately, I always have a tumbler of coffee always at hand, otherwise I’d fall asleep from the boredom and the lack of diversity out on the freeways.

    No offense, but when I see a Toyota or Lexus, I sometimes think to myself about the driver and how they just threw in the towel and gave up the car shopping process in favor of a “safe” choice (“oh, they’ll run forever, oh, they get good mileage…”).

  • avatar
    Volt 230

    And when I see other brands broken down by the side of the road and I pass by in my decrepit looking Corolla, I pat myself for choosing such a dull, boring transportation device.

    • 0 avatar
      petezeiss

      Yep, Boring is better than Breaking.

      I figure about 10% of new car buyers have these hissy fits about “boring appliances”, getting all Felix Unger about the tiniest design fillips, acceleration times, squooshiness of the interior plastics.. etc.

      A very vocal, flashy 10% insisting that everyone else is a dumb herd animal. Why does that sound so familiar?

      • 0 avatar
        PentastarPride

        I have to agree that while Toyota is known for their reputation for reliability, that reputation tends to come from cars that are 15-25 years old. It’s just like the opposite of Chrysler, some people won’t touch one now based on what they have heard or had experienced 15-20 years ago, specifically the 2.7 engine issue and various transmission problems in their lineup in the 1990s. That doesn’t mean the cars Chrysler produces now still have these problems as those drivetrains are long gone.

        A 1990 Toyota Camry, and the related stories of these cars hitting 300,000 miles, is NOT in *any way* related to a 2014 Camry. For all we know, the 2014 Camry (or any given model from the past couple years, for that matter) could all have problems that cause them to grenade at, say, 80,000 miles.

        Maintenance and care have a lot to do with reliability. The probability of mechanical issues will fall greatly if things are done by the book, on time and every time. Some cars will hold up to abuse better than others, but if a person cannot take care of their vehicle, they probably shouldn’t own one to begin with.

  • avatar
    Jeff S

    Boring and appliance like reliability and economy is not a bad thing. It is good to have a vehicle that you can rely on. I do agree that the Venza is overpriced for what it is. Toyota has a lot of hard cheap plastics in all their vehicles but they are good reliable vehicles. But then most of the other manufacturers are making better and more reliable vehicles so Toyota is not alone anymore. Toyota cannot rely on their reputation alone for very much longer.

    • 0 avatar
      petezeiss

      I would love to see Toyota’s internal studies of American demographics and their conclusions drawn from them. They have to know that they largely live and die here by having captured baby boomers and their older children.

      Most customers won in the 1970s and ’80s by Japanese makers (like me for Honda) will likely go to the nursing home refusing to seriously consider any other brand unless it were one of their premium lines. The conversion experience in our youth from gas swilling/leaking, crudely cobbled domestic cars was that powerful.

      But obviously even though there is some generational hand-off of this loyalty it can’t last forever. And intellectually I realize that the Koreans and some domestics have closed the reliability and refinement gap with their Japanese QA sensei.

      Maybe the long-viewed Japanese leadership is ready for some pull-back from the American market and an amped-up run at the Chinese whose own domestic efforts are predictably doomed by corruption and impatience.

  • avatar
    Jeff S

    The Japanese automakers are just as interested in the Chinese market as the US, but there is still a lot of hatred and mistrust between China and Japan. World War II and the Japanese Imperialism in China left a bitter hatred of the Japanese. The Chinese like and trust the US more than they trust Japan. There still needs to be more time for China to heal their relations with Japan.

    • 0 avatar
      petezeiss

      “a bitter hatred of the Japanese”

      Well, that’s the History Channel level of understanding the situation and is no doubt still a reality for millions of elderly Chinese. But if Tokyo became serious about bribing the right Central Committee members and making a few public gestures of remorse (PM to stay the hell out of Yasukuni for a while) in no time at all it would be:

      “Let a Billion Camrys Roll!”

      Especially so if those Toyotas were rebadged for Great Wall, Chery, Dongfeng…whomever. I mean, Japan Inc. needs to find another gargantuan middle class *somewhere* to sell to after ours disintegrates. And Beijing can simply order up any popular sentiment they want along with the mobs to enforce it.

  • avatar
    Jeff S

    @petezeiss–I don’t disagree with you just that it will take Toyota time to infiltrate the Chinese market. Toyota is already in China as VW, GM, Ford, Chrysler, BMW, and some others. Toyota is just as eager as the other manufacturers to get a piece of the growing Chinese market. The growth is no longer in the US market and that is why Toyota is not expanding capacity in the US. Asia is where the potential for future growth is.


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