Toyota Motor Manufacturing U.S.A. Inc. unveiled plans this week to build a second car assembly plant that will double capacity to about 400,000 cars annually at the Georgetown complex that now makes Camry cars.
The $800 million expansion project is expected to begin by late 1993 and add about 1,500 new jobs, Toyota said during a press conference at its Georgetown plant.The new plant will produce more Camrys, which will undergo a major restyling for 1992.
When the expansion project is completed, Toyota's car production in the United States will exceed 600,000 units. Toyota also makes subcompact cars in a joint venture with General Motors in Fremont, Calif., with subcompact trucks to be added to that facility by late 1991. Toyota also makes Corolla subcompact cars at a plant in Cambridge, Ontario.
The latest expansion emphasizes Toyota's efforts to localize manufacturing operations and increase production capabilities in countries where its cars are sold.
It is also part of Toyota's plans to sell 1.5 million vehicles a year in the United States by 1995, with half of those made in North America.
Toyota's latest plans raised speculation Japan's largest automaker could eventually topple Chrysler Corp. as the third largest carmaker in the United States, with the capacity to exceed 600,000 units in the United States during the early 1990s.
But Wall Street analysts said Toyota still has some way to go before it displaces Chrysler in domestic car production.
"It will be a while before they catch up," said automotive analyst David Healy, of Barclays Bank in New York, adding that Chrysler's 1990 U.S. car production is estimated to be about 726,000 cars.
Healy said the new plant is aimed more at lowering the number of imported Camrys.
"Toyota's pattern is to build more cars in the United States and import fewer from Japan," he said. "The market for Camrys is not really changed by this action, and the competitive level in the United States has not really changed."
So far this year, Toyota has made about 180,000 Camrys at its Georgetown plant and sold another 60,000 Camrys made in Japan, Healy said.
Currently, the Kentucky-built Camry is still classified as an import because less than 75 percent of its parts are North American-made. That is expected to change by 1992 with the new-generation Camry.
Toyota said the new plant will further enhance opportunities for U.S. auto suppliers. Alex Warren, senior vice president for TMM, said the number of U.S. suppliers used by TMM for parts and raw materials has more than doubled since production began in 1988.
In dollars, TMM purchased $70 million in U.S. parts and materials in 1988. That figure is expected to increase tenfold by next year, to more than $700 million.
"With this new production facility expansion," Warren added, "we will be offering even greater opportunities to U.S. suppliers for parts, materials, goods and services."
"This expansion will allow Toyota to increase the percentage of American-made vehicles it sells in the U.S.," Warren said. "That means we can better meet U.S. customer needs and contribute more to the U.S. economy."
While Toyota cited its "build-where-we-sell" policy, it also said the Georgetown expansion will allow it to consider further exports.
TMM now exports Camrys to Taiwan, and previously announced plans to export up to 40,000 right-hand-drive Camrys and up to 100,000 engines to Japan starting in 1992.