NAGOYA, Japan—Toyota Motor Corp. is
set to start building plants again following a three-year freeze,
spending around $1.25 billion on factories in Mexico and China, people
familiar with the matter said Friday.
plants are likely to start operating around 2018 or 2019 and will
expand Toyota’s production capacity by several hundred thousands of
vehicles, the people said. An official decision is expected to be made
later this month, they said.
The world’s best-selling auto maker is finally shifting into expansion mode after a period of caution during which President Akio Toyodacalled for an overhaul of manufacturing lines.
the last several years, Toyota has been developing new manufacturing
equipment and engineering technology that can be used to shrink the size
of new plants and make some existing plants more efficient. The auto
maker recently said it can cut initial plant investment by 40% compared
with 2008 levels.
are gradually starting to witness the next stage for new plants,” Mr.
Toyoda told investors last month. He said the company had to make a
“sweeping change” to “make our plants competitive, instead of merely
aggressively built new plants in the early and mid-2000s, leaving it
with excess capacity and high fixed costs after the global financial
crisis. It hasn’t made a major investment in new factories since 2012,
when it announced a new plant in Thailand.
truly suffered. We rapidly expanded production, but there was no time
for workers to think,” Mitsuru Kawai, a senior managing officer at
Toyota, told reporters on Friday in Nagoya, central Japan.
While Toyota froze its investments—a move it has called “a willful pause”—rivals including Volkswagen AG have
expanded capacity to meet growing demand. Mexico has developed into an
auto manufacturing hub that exports cars to the U.S., while China is the
world’s biggest auto market.
“In China, the European and U.S. auto makers like General Motors are leading,” Tetsuo Ogawa, one of Toyota’s managing officers leading the China business, told reporters Friday. He said Toyota holds a 5% to 6% share in the market and is putting priority on quality over sales growth.
Chinese auto market continues to grow, though the pace of gains is
expected to slow this year. The China Association of Automobile
Manufacturers said it expected passenger-vehicle sales to rise 8% to
21.3 million vehicles this year, compared with 9.9% growth in 2014 and a
16% increase in 2013. Toyota said last year that it was aiming to
double sales in China to around two million vehicles.
has been working on manufacturing lines that can be quickly adjusted in
several hours or less to respond to changes in demand for various
models. It has also developed more-efficient laser welding machines and
press equipment that helps shorten lines. The new technology is expected
to be introduced at the new plants as well as some existing factories.
the Myochi plant in central Japan, where Toyota makes power
train-related parts and other components, one section has shrunk to 12
meters from 27 meters, Mr. Kawai said.
has said it plans to manufacture 10.21 million vehicles in 2015 and
sell 10.15 million vehicles, figures that include group companies Daihatsu Motor Co. and Hino Motors Ltd.
became the first auto maker world-wide to make and sell more than 10
million vehicles a year. But some analysts say Volkswagen, which has
been aggressively expanding sales, could surpass the Japanese auto maker
And rumors abound as to why David Powell of the Piedmont Triad Partnership is leaving town.