Toyota Chopping Big Tundra's Role in U.S. Picture
By Bill Visnic July 10, 2008By Bill Visnic
Following the lead of its Detroit-based rivals, Toyota Motor Corp. is resigning itself to the fact high-priced gasoline has driven a stake into the heart of pickup-truck sales, announcing yesterday it is suspending production of its Tundra fullsize pickup and essentially removing an entire plant's worth of Tundra production from its future manufacturing mix.
What's replacing Tundra? Manufacturing - for the first time on American soil - of the high-efficiency Prius hybrid-electric vehicle.
A Toyota spokesman says capacity for Prius at the company's under-construction plant in Blue Springs, MS, will be around 120,000, "but that number has not yet been finalized. Toyota is studying the matter further."
In an abrupt turnaround of plans dictated by the rapidly eroding U.S. pickup segment, Toyota announced it is earmarking capacity at Blue Springs to production of the Prius. That plant, scheduled to begin producing its first cars in 2010, originally was slated to produce the Highlander crossover. Toyota said the plant would build 120,000 Highlanders annually.
Instead, Highlander manufacturing will be shifted to Princeton, IN, which currently is one of two plants assembling the Tundra (as well as the Tundra-based Sequoia SUV and Sienna minivan). Beginning next spring, all Tundra production will be consolidated at Toyota's assembly plant in San Antonio, TX, which came on stream in the second half of 2006 and was constructed specifically to build the current-generation Tundra. The plant has capacity of 200,000 units.
What's more, Toyota is suspending all current production of the Tundra for a period of three months, starting on August 8.
Toyota says the Princeton plant last year produced 101,482 Tundras; San Antonio built 138,619 units of the fullsize pickup. Although this amounts to some 240,000 units, a number exceeding by 20% the capacity of the San Antonio site where all Tundra production now will take place, Tundra sales have slipped 7 percent this year - but plunged 47 percent in June alone, and are on pace to sell slightly more than 150,000 units for the full year.
Given the continuing sales dropoff for thirsty pickups and SUVs, the Tundra's pace to sell 150,000 units this year may not be maintained, meaning San Antonio's capacity should be more than enough to meet future Tundra demand.
Highlander, too, may be suffering from its largeness. Sales for the first half were off by 4.6 percent, despite the fact the '08 Highlander is in its first year of a substantial redesign, and June sales were down an alarming 31.3 percent.
Highlander volume will be 120,000 units at its new home in Princeton, a Toyota source says, adding, "Toyota will monitor the market closely and adjust if necessary."
PHOTOS:
1. Tundra production will be consolidated in a single plant in San Antonio, TX.
2. Toyota has long considered the case for producing the high-demand Prius in the U.S. The collapse of the fullsize pickup market now has created the opportunity.
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People complain about American manufacturers and their lack of forethought. Well Toyota is just as bad - they design and build a much less fuel efficient, heavier truck in the new Tundra and they do the same with the Highlander SUV. Not clever. Now they have a new, over budget factory in Texas that will operate at 75% of capacity - also not good.
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