Improving its productivity to utilize existing machine capacity is’s “first priority” in North American manufacturing, a top company official says.
Subaru’s Indiana plant to end Camry production in 2016.
TRAVERSE CITY, MI – In the last decade,seemingly announced a new North American vehicle-assembly plant every few months.
But it has been six years since the automaker’s last revealed plans for a new facility, in Blue Springs, MS, for production of the Corolla.
Two years ago,said it would expand its Georgetown, KY, plant in 2015 for the Lexus ES, but with just a 50,000-unit dedicated line.
Much like rival, Toyota is trying to do more with its existing manufacturing footprint.
“I have been encouraging my members to further improve our productivity and quality at the shop floor so that we can fully utilize existing machine capacity and we can increase our output from an existing plant. That is our first priority,” Simon Nagata tells WardsAuto here in an interview at the Management Briefing Seminars.
That’s why Nagata, president-Toyota Motor Engineering and Mfg. North America, says he doesn’t expect the No.1 Japanese automaker to add brick and mortar to bring Camry output from Subaru’s Indiana plant in-house.
“I don’t think so,” Nagata says when asked if an expansion of Georgetown will be necessary. Toyota should be able to absorb Subaru of Indiana Automotives’s Camry volume at the Kentucky plant, already home to the bulk of U.S. Camry output, he says.
Toyota also could import more of the sedans from Japan, but Nagata doesn’t see this as likely, because the automaker wants to maintain its current import/North American-production mix.
Just 223 Camrys sold in the U.S. last year were imported, down from 9,867 in 2009.
This spring, Toyota announced SIA in Lafayette, IN, would stop building the Camry in fall 2016. SIA has assembled some units since 2007 and last year built 97,003 of the sedans, WardsAuto data shows.
Georgetown had the highest volume of any passenger-vehicle plant in the U.S. last year, assembling 504,213 vehicles, 348,970 of them Camrys.
While the math doesn’t work now for Toyota to add nearly 100,000 additional Camry builds at Georgetown, it may in the future.
“There are several unknown factors, especially the sales volume of the three models at the time SIA will stop producing Camry (at) the end of 2016,” Nagata says.
It’s hard to imagine Camry volume declining, as the car has been the top-selling model in the U.S. for a decade, with more than 400,000 units delivered last year.
Camry sales this year are up 8.3% through July, WardsAuto data shows.
After a strong start with the next-generation ’13 model last year, Avalon sales have declined in 2014 and are off 11.4% to 38,123 through July; Venza sales are down 20.0%, to 18,794, through the first seven months.
Toyota has struggled to get traction with the latter, a Camry-based midsize CUV, and the Venza is rumored to be on death row. If the Venza is nixed, WardsAuto calculations show 50,000-60,000 units of capacity would be freed up at the Kentucky plant for the Camry.
Meanwhile, Nagata perks up when asked if Toyota, like many of its competitors, has its eyes on added capacity in Mexico.
The country’s auto-manufacturing industry is booming, something that hasn’t gone unrecognized by him.
“There are many talented auto suppliers already there,” he says. ‘Comparing to two or three years ago, the supply base in Mexico is much, much stronger.”
Toyota operates a relatively small plant in Mexico, near Tijuana, which produces the Tacoma midsize pickup, mostly for the U.S. market.
“It is quite necessary for us to keep investigating the best strategy (for Mexico), fully utilizing where growth is of the Mexican supply base,” he says.