Chicago: US President Donald Trump took credit for Toyota Motor Corp. investing $1.33 billion in an existing US factory, championing spending by a Japanese automaker he’s blasted for building a plant in Mexico.
The outlays in Georgetown, Kentucky, aren’t new — they’ve been in the works for years. But the way they’re being marketed is. Instead of emphasising cost efficiency, Toyota is highlighting ample spending and the previously announced addition of 700 jobs. The president has taken notice.
Toyota’s announcement “is further evidence that manufacturers are now confident that the economic climate has greatly improved under my administration,” Trump said in the automaker’s statement Monday.
The bigger the US investment the better right now for Toyota. Trump singled out the company in January for its plan to build a Corolla small-car factory in Mexico. As Toyota’s North American Chief Executive Officer Jim Lentz discussed setting up autonomous- and connected-car business units in the US with Trump last month, the president cut him off and said the company needed to “build those new plants here.”
As part of the $10 billion that Toyota plans to invest in the US over the next five years, the company’s spending in Kentucky paves the way for output of the redesigned Camry sedan later this year. The car will be the first in North America to adopt the Toyota New Global Architecture system for designing, engineering and manufacturing vehicles.
In describing the system referred to as TNGA in March 2015, Toyota said it was aiming to reduce the amount of spending required to prepare the production line for a new model by about half. The Toyota City, Japan-based company is avoiding any emphasis of the frugal benefits of TNGA with regards to its plans in Georgetown.
“This is the largest investment in our plant’s history,” Wil James, the factory’s president, said in the statement. “This major overhaul will enable the plant to stay flexible and competitive, further cementing our presence in Kentucky.”
Mexico scrutiny
In January, Trump criticised a $1 billion factory in Mexico where Toyota will begin making Corolla compact cars in 2019. While he’s made similar denouncements of General Motors Co. assembling the Chevrolet Cruze south of the border and attacked Ford Motor Co. before the automaker cancelled a small-car plant in Mexico, he’s also praised Chief Executive Officers Mary Barra and Mark Fields and hosted them for several White House visits.
When Trump met with auto executives and workers in Michigan last month, he strolled through a vehicle display with Barra, Fields and Fiat Chrysler Automobiles NV CEO Sergio Marchionne and posed for a group photo. The North American chiefs of Japanese, Korean and German automakers stood by and watched.
Toyota’s Georgetown plant — about the size of 156 football fields — built more than 500,000 Camry, Avalon and Lexus ES sedans last year. That was roughly a quarter of Toyota vehicles produced in North America.
Camry redesign
The Camry has been completely redesigned with a longer, lower and stiffer body and improved suspension to boost driving dynamics. The makeover comes just as crossover sport utility vehicles like the RAV4 become the new American family car, a blow for Toyota because Camry has been a top-selling model in the US for 15 years.
Toyota’s RAV4 SUV deliveries climbed 5.8 per cent this year through March, while Camry declined 13 per cent, according to researcher Autodata Corp. Last year, Camry outsold RAV4 by just 36,477 units, a much narrower margin than the roughly 160,000 that separated them in 2014.
Toyota built 2.12 million vehicles from eight North America assembly plants last year. The company imported more than one in four vehicles sold in the US from outside North America, including Prius hybrids and Lexus NX crossovers shipped from Japan.
BOX — Volvo Cars concerned about possible US import tax
Charleston, S.C.,
Volvo Cars would suffer if the United States enacts taxes on imported goods, even as the company prepares to hire up to 4,000 workers for a new plant in South Carolina, the head of its North American operations said.
Volvo, a Swedish brand owned by China’s Geely Automobile Holdings Ltd, is concerned about trade restrictions such as the border adjustment tax proposed by US. President Donald Trump and some of his fellow Republicans in Congress.
“It’s very bad business for us unless we transfer all that extra money towards the list price,” Volvo North America Chief Executive Officer Lex Kerssemakers told reporters at a Saturday briefing in Charleston, South Carolina. “The customer is the loser, or we are the loser. Everybody’s the loser.” Volvo plans to open its $500 million South Carolina factory in late 2018. The plant, the only one in the automaker’s worldwide network to build the S60 sedan, will employ 2,000 workers initially and 4,000 eventually.
The company also plans to carry out the final assembly of a second, still-unspecified vehicle at the plant.
-Reuters
