Toyota Likely to Expand U.S. Assembly Plants : Autos: Another operation is needed in this country to keep up with sharply rising demand.
Toyota Motor Corp. is likely to expand its U.S. auto assembly operations in Georgetown, Ky., following the practice of its Japanese peers, auto industry experts said Monday.
Toyota, which was the last of the Japanese auto giants to establish a U.S. factory, is expected soon to announce another car assembly operation in this country to keep up with sharply rising demand for its cars and trucks.
Toyota officials denied the specifics, but not the general truth, of a report in the Wall Street Journal that the company plans to build a second U.S. assembly plant and to announce a site within 60 days.
“No decision has been made,” a Toyota spokesman in Detroit said. But he added, “an announcement could be forthcoming in the time frame” of 60 days.
The Journal account followed a trade publication report quoting Toyota Senior Vice President Robert McCurry as saying the firm’s U.S. arm hopes to be building 750,000 vehicles a year here by 1995.
“To do that you’d need another plant,” Toyota spokesman John McCandless conceded.
Another assembly plant would actually be Toyota’s fourth production site in North America, where capacity next year is due to reach 480,000. The company already plans to add a 100,000-unit-a-year truck line to its Fremont, Calif., joint venture with General Motors. It also has a small assembly plant in Cambridge, Ont.
McCurry couldn’t be reached for comment Monday. However, Toyota has lagged behind smaller Japanese rivals Honda, Nissan and Mazda in U.S. manufacturing, and industry observers have expected Toyota to expand further here to keep pace in the U.S. market.
Foreign auto firms have built eight U.S. assembly plants, most of them in Michigan, Ohio, Illinois, Kentucky and Tennessee. Output from the plants has captured 14.5% of U.S. car sales and 3.5 % of truck sales, and penetration is expected to rise sharply in the early 1990s. That will more than offset a decline in sales of vehicles imported from Japan.
“I think we’re looking at complexes. We see signs of a big Toyota complex at Georgetown,” said Daniel Luria, economist at the Industrial Technology Institute in Ann Arbor, Mich.
Honda, which in 1979 became the first Japanese auto maker to set up production in this country, now has two related assembly plants in the immediate vicinity of Marysville, Ohio. Nissan has announced it is doubling its capacity at Smyrna, Tenn.
In both cases, vast networks of suppliers have established operations nearby, making it more efficient to concentrate any expansions in the same region. However, Toyota officials said sites outside Georgetown are also under consideration.
Toyota is widely expected to eventually buy outright from GM the half of the assembly plant in Fremont it does not already own. However, its remoteness from the concentration of parts suppliers in the center of the country argues against the California site for another assembly plant, some say.
