Toyota's U.S. operations: full-scale release of Toyota brand TNGA and Lexus brand GA-L

Increased production of SUVs and pickup trucks

2017/09/21

Summary

Exterior of the new LS500
Exterior of the new LS500. Thanks to the newly developed GA-L platform, Lexus has been able to create a four-door sedan with coupe styling. (Photo: Toyota)

  This report will cover Toyota's U.S. operations, its product plans, increased production of its light trucks, and the degradation of profitability of its North American business.

  As part of the group's product plans, TNGA-based vehicles will be released under the Toyota brand, while the Lexus brand will release vehicles utilizing the GA-L platform designed for FR unibody vehicles. Vehicles such as the Toyota Camry, Lexus LC, and Lexus LS will be released in succession, all of which have increased flexibility during the production process, as well as achieving low fuel consumption and sporty driving and styling thanks to a low center of gravity. Additionally, the OEM will release vehicles lacking in its existing lineup, such as sub-compact crossovers (Toyota C-HR, Lexus UX Concept) and a passenger vehicle-based SUV with three rows of seats (Lexus RX).

  In recent years U.S. market demand is rapidly shifting from passenger vehicles to light trucks, such as SUVs and pickup trucks. Toyota's strength was conventionally in passenger vehicles, so it lacks the capability to supply light trucks and is rushing to increase production of such vehicles for the U.S. in Japan, Mexico, and other areas. Toyota's North American operating income has sharply decreased since the second half of FY 2016, and halved for the period from April to June 2017 on a year-over-year (y/y) basis (JPY 89.2 billion). Causes for this drop can be attributed to intensifying price competition due to stagnant growth in the U.S. market, as well as increased incentives for passenger vehicle models.

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