Toyota Lays Plans to Meet Surging U.S. Demand
- By Edwina Gibbs
- Jun. 29 1999 00:00
TOKYO -- Toyota Motor Corp. will likely build a new production line or plant in the United States to cope with robust demand, the company's new president Fujio Cho said Monday.
"At the moment, most of our U.S. production facilities are working at near full capacity, and it may be that we have to do something new," Cho said.
He added that a new facility had a 70 percent to 80 percent likelihood of going ahead and that Toyota would make a final decision by the end of the year.
In his first meeting with reporters since his formal appointment as president Friday, Cho also said Toyota may soon need to revise its U.S. sales goal upward from its current short-term target of 1.5 million units annually.
Toyota, along with other Japanese automakers, has seen its U.S. sales climb in line with the country's robust economy.
The company sold a record 1.36 million vehicles in the United States in 1998 and had its best month ever in May with sales up nearly 5 percent from the previous year.
Rival Honda Motor Co. said earlier this year that it will build a light-truck assembly and engine plant in Alabama.
Cho said Toyota, Japan's biggest automaker, had not begun any studies about possible sites, but building a new production line on Toyota land in Indiana was one of several possibilities and the one he personally favored.
Toyota builds Tundra pickup trucks at its Princeton, Indiana, facility.
Cho declined to offer specifics on what vehicle model a new facility would produce, although he said candidates could include the hybrid-engined Prius, luxury division Lexus vehicles and passenger car models.
Cho reiterated Toyota's long-term goal of selling at least 6 million vehicles worldwide by early in the next century, as well as the car company's determination to increase sales in Japan and be at the forefront of new technologies.
He said that while former Toyota president Hiroshi Okuda, who was appointed Toyota chairman, had set out what Toyota should do, his job was now to work out how Toyota should attain its goals.
While stressing that the automaker was keen to strengthen the cohesiveness of companies in the Toyota group, Cho said the idea of setting up a holding company was still under study. Toyota, however, had no plans to raise its stakes in affiliated auto parts manufacturers Denso Corp. and Aisin Seiki Co., he said.
Cho added that he favored the trend toward modular assembly, in which parts suppliers build large sections of vehicles and ship them to automakers for final assembly.
He added that, while Toyota was not reluctant to buy some technologies from overseas companies, modular assembly could be managed within the Toyota group.
"Modular assembly, the standardization of auto parts, common platforms f I want Toyota to pursue all of these three things," he said.