Toyota increases production capacities in North America and emerging markets

Plans to produce key hybrid system components in US and China



 The following is a summary of production and sales plans for 2012-2013 and overseas operation enhancement plans of Toyota Motor Corporation (excluding Hino and Daihatsu). (Toyota's operations in Japan and financial results for FY2011 will follow in a separate report.)

 Toyota's global production declined to 6.93 million vehicles in 2011, but the company plans to produce 8.65 million units in 2012 to top the all-time high marked five years ago in 2007. Toyota also plans to increase its global sales in 2012 to 8.58 million units mainly in emerging markets and renew the record.

 The company will continue to expand local production under the concept of producing vehicles where needs are. Toward this goal, new organizations were inaugurated as of January 1, 2012, dedicated to the rapid localization of production and procurement in foreign countries, and to vehicle model planning for emerging countries.

 Toyota is proceeding with drastic production capacity enhancements and local production plans in North America and emerging countries.

 In North America, Toyota's new plant in Mississippi began operating and the completed vehicle production capacities at the Indiana plant and the Woodstock plant (Canada) are being increased along with further localization of powertrains. To minimize the influence of the yen's high appreciation, Toyota plans to turn the U.S. into an export base to third countries taking advantage of the FTA between the United States and Korea, and so on.

 Toyota is considering producing the Prius in the United States starting in or around 2015. The company is also planning to produce key components of its hybrid vehicles in the United States.

 As for China, Toyota is determined to regain momentum in vehicle sales in China, using the localization of hybrid and other eco-car technologies as breakthroughs, and see market penetration of hybrid vehicles there. The company plans to locally produce hybrid system components developed by the newly-established Toyota Motor Engineering & Manufacturing (China), and start using them in production cars in or around 2015.

 Toyota also has plans to increase or otherwise start local production of vehicles in other parts of Asia (Thailand, Indonesia and India) and in Russia, Argentina, Brazil and Egypt. The company will also promote local production of powertrains in Thailand and India.

 In the "Toyota Global Vision" unveiled in March 2011, one of the global challenges was to build a global framework that will make it easier for regional operations to get involved in carmaking more directly. As the first step of undertaking, the new Avalon was launched in April 2012 that was developed under the leadership of the US team.

Planning an all-time high global production of 8.65 million units, global sales of 8.58 million units in 2012

 Toyota has recovered from the production cutback attributable to the Great East Japan Earthquake and the floods in Thailand in 2011 (Toyota produced 6.93 million vehicles in 2011). The company announced plans to produce 8.65 million units of Toyota and Lexus brand cars globally in 2012 to exceed the past peak production of 8.54 million units marked five years ago in 2007. The planned quantity includes 5.25 million units overseas (up 1.08 million cars) and 3.40 million units (up 0.64 million cars) in Japan.

 Toyota's global sale plan for 2012 is set at 8.58 million vehicles. This, too, will exceed the past record of 8.43 million vehicles in 2007. The high goal is based on the expectation of selling 6.95 million vehicles overseas (up 1.05 million vehicles) mainly in North America and emerging countries, and a substantial increase to 1.63 million vehicles (up 430,000) in Japan favored by the provision of eco-car tax credits. Emerging markets, other than Japan, US and Europe, are expected to account for 45 percent in sales (33.0 percent in 2007, 43.0 percent in 2010).

 Toyota has set its global production goal at 8.98 million vehicles, and global sales goal at 8.95 million vehicles for 2013 which, if achieved, will set still new records.

 Toward these goals, Toyota has established new organizations as of January 1, 2012, dedicated to the rapid localization of production and procurement, and to vehicle model planning for emerging countries.

Vehicle Production and Sales (Toyota and Lexus)

(1,000 vehicles)
2007 2008 2009 2010 2011 2012
Production Japan
Total 8,535 8,211 6,371 7,623 6,929 8,650 8,980
Sales Japan
Total 8,429 7,996 6,980 7,527 7,100 8,580 8,950
Emerging markets 33.0% 37.1% 39.3% 43.0% - 45.0%
from Japan
Worldwide 2,666 2,586 1,445 1,745 1,569 (FY2012)

Source: Toyota press releases 2011.12.22/2011.1.25/2012.1.27/2012.2.3
(Note) Emerging countries refer to areas other than Japan, North America and Europe. Toyota is set to increase the ratio of sales in emerging countries to 50 percent by 2015.


Organizations dedicated to localization of production and procurement activities (inaugurated as of January 1, 2012)

Organization Role and aim of inauguration
BR Vehicle & Parts
Localization Dept.
 A new BR organization committed to the rapid localization of production and procurement (BR: Business Reform is a generic name of organizations inaugurated as deemed necessary by Toyota to challenge a business issue in an expeditious manner)
Emerging Country
Planning Div.
 A new division dedicated to planning vehicle models for emerging countries (existing organizations were reorganized into Emerging Country Planning Div. and Product Management Div., the latter dedicated to global models)

Source: Toyota press release 2011.12.20


North America: Increasing production capacities of assembled cars and powertrains and their exports from the U.S.

 In November 2011, Toyota began producing the Corolla at its new plant in Mississippi. When NUMMI, a joint venture with General Motors, was closed permanently in April 2010, the Corolla production was transferred to the Takaoka and other plants in Japan. A total of 64,000 Corollas were exported from Japan in 2011. The start of production at the new plant in the US will reduce exports from Japan to nearly zero which will help avoid loss attributable to the yen's high appreciation. It is said Toyota is considering exporting the Corolla from the US to third countries.

 The production of the Highlanders is following a similar path. Production of 50,000 Highlanders, currently exported from Japan to North America and other areas, will be transferred to the Indiana plant in the United States upon which its production in Japan will be discontinued. A half of the 50,000 Highlanders will be exported from the United States to Australia and other areas.

 In March 2012, the FTA between the United States and Korea came into force and the duty on passenger cars exported from the United States to Korea was lowered from 8 to 4 percent (to be abolished entirely in 2017). Accordingly, Toyota began exporting the Camry and the Sienna, produced in the United States, to Korea. Toyota will make the best use of the United States, having the largest production capacity after Japan, as its export base.

 As for powertrains, production of the inline four-cylinder engines started at the Alabama plant in September 2011, and the company plans to increase production capacity of the inline four-cylinder engines at the Kentucky plant as well. Toyota had announced plans to increase the production capacity of the 6-speed automatic transmissions at the West Virginia plant from 270,000 a year to 400,000 by the end of 2012 (announced in February 2011). Favored by the market recovery, additional plans were announced to further increase the capacity by 120,000 to 520,000 units by the summer of 2013 (announced in March 2012).

 Toyota is determined to fully localize development of vehicles produced in North America. In April 2012, the new Avalon was introduced as the first of the US-developed model. Toyota also announced plans to add more staffers to the Toyota Technical Center which is responsible for the local model development.

North America: Increasing production capacities of assembled vehicles and their exports from the US

Mississippi plant
 Construction of the Mississippi plant was decided in February 2007 but the work was postponed until June 2010. The plant has been producing the Corolla since October 2011 with an annual capacity of 150,000 vehicles (two-shift operation). Two-shift operation started in February 2012 and the plant now employs approximately 2,000 people as planned originally.
Indiana plant  In February 2012, Toyota announced it would increase production capacity of the Indiana plant from approximately 280,000 to approximately 330,000 vehicles in the second half of 2013. The plant currently produces large-size vehicles such as the Highlander, Sequoia and Sienna. The plant will produce more Highlanders and start producing the Highlander Hybrid as well. These changes will cost US$400 million of new investment and create 400 new jobs.
 Half of the 50,000 Highlanders to be added in the second half of 2013 will be exported to Australia, Russia and other markets.
Woodstock plant
 In March 2012, Toyota announced it would increase production capacity of the RAV4 model at its plant in Woodstock, Canada, from approximately 150,000 to approximately 200,000 vehicles by early 2013. This will cost approximately 80 million Canadian dollars of new investment and create 400 new jobs. Of the 170,877 RAV4s sold in 2010 in the United States, 69,027 were imported from Japan.
 Starting in 2012, Toyota is producing RAV4-based EV, co-developed with Tesla Motors, at the plant in Woodstock, Canada. The gasoline-fueled model production line of the plant was rebuilt to accommodate EV production. Batteries, motors and other key components of the EV are procured from Tesla Motors' plant in California. The new EV will launch in the summer of 2012 (sales are limited to California for the time being). Toyota plans to sell 2,600 units in three years.
Increasing powertrain production
Inline 4-cyl. engine
(Alabama plant)
 Production of the inline four-cylinder 2500cc/2700cc engines started in September 2011 at the Alabama plant where the V8/V6 engines were produced. Toyota invested US$147 million to build the annual capacity of 216,000 units of inline four-cylinder engines that will be fitted in the new Camry, Highlander, RAV4, Sienna and Venza.
Inline 4-cyl. engine
(Kentucky plant)
 To meet the growing demand for its 2500cc inline four-cylinder AR engines, Toyota will increase the engine production capacity of the Kentucky plant from 440,000 to 540,000 units by August 2013. This will cost US$30 million of investment including contingent investments at suppliers. The AR engines are also being produced at the Alabama plant.
6-speed AT
(West Virginia plant)
 Toyota will invest US$64 million to increase the annual capacity of 6-speed automatic transmissions at the West Virginia plant from 270,000 units in February 2011 to 400,000 units by the end of 2012 (announced in February 2011). Toyota will make additional investment of US$45 million to increase the capacity to 520,000 units in the summer of 2013 (announced in March 2012). The 6-speed ATs are used in the Avalon, Camry, RX350, Sienna, and Venza produced in North America and powered by the V6 engines.
New Avalon debuts to mark the first of the locally developed and produced vehicles in North America
 Toyota will fully localize the development of models that are produced in North America. The first of such models, the new Avalon, was exhibited at the New York International Auto Show held in April 2012 and will be released for sale in the second half of 2012. The entire process from designing to engineering, parts selection and manufacture was led by local teams.
 Toyota will increase the staff size of the Toyota Technical Center (TTC), a research and development function of Toyota Motor Engineering & Manufacturing North America, from approximately 1,100 as of April 2012 by approximately 150 within 2012, and by approximately 100 more by the end of 2017.
 In addition, TTC's new office was established in April 2012 in Toyota InfoTechnology Center located in Silicon Valley in California, US. Its role is to coordinate with other companies in the area and expedite the development of infotainment technologies for automotive application.

Source: Toyota press releases 2011.2.26/2011.9.30/2012.2.7/2012.2.9/2012.3.2/2012.3.28/2012.4.5/2012.5.8


Integrated production of the Prius in the US planned to start by 2015

 Toyota is studying the possibility of producing the Prius in the United States starting in 2015 at the earliest. The key hybrid system components will be produced by Toyota in the United States or otherwise procured from local suppliers.

 The Prius sold 136,463 units in the United States in 2011, down 3.2 percent from a year earlier partly due to a short supply. But the sales in January to April, 2012, rose 55.7 percent year-on-year to 86,027 units thanks to the fuller lineup with the addition of the Prius V (Prius α in Japan) and the Prius C (Aqua). The quantity has become large enough to justify a dedicated assembly plant.

 According to the Automotive News dated April 23, 2012, the sales of electrically-driven vehicles (including HV, PHV and EV) in the United States in January to March 2012 rose 44 percent year-on-year to 113,457 units. The notable increase likely results from the launch of several GM cars fitted with the mild hybrid eAssist system and, more recently, the price of gasoline nearing $4 per gallon.


China: Hybrid vehicles built with locally produced system components to debut in 2015 at the earliest

 In December 2011, Sichuan FAW Toyota Motor began production of the third-generation Prius and sales of the locally produced vehicle began in February 2012. The company aims to sell 3,000 units a year initially using system components shipped from Japan.

 Toyota plans to introduce PHV and EV in China in 2013.

 Toyota intends to use the localization of hybrid and other eco-car technologies as a breakthrough to catch up with competitors in sales in China. Toyota is determined to realize market penetration of hybrid vehicles there. Toward this goal, Toyota has invested US$689 million in establishing Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC), a new function dedicated to the development of the cutting-edge component technologies in China. TMEC will develop HV system components and start local production in or about 2013 with further plans to produce HV and other eco-cars in China in or about 2015 fitted with those system components.

 Toyota exhibited the "Yundong Shuangqing" China-only concept hybrid at the Beijing International Automotive Exhibition held in April 2012. The hybrid will be fitted with hybrid system components developed by TMEC and produced locally in China.

 As for gasoline-fueled cars, Toyota will start production of the Corolla at the new Changchun plant in the first half of 2012 (100,000 units a year). Toyota also exhibited a concept of its compact global strategic car at the 2012 Beijing International Automotive Exhibition.

"Yundong Shuangqing"
"Yundong Shuangqing" China-only hybrid concept at the 2012 Beijing International Automotive Exhibition

"Toyota Dear Qin"
"Toyota Dear Qin" hatchback, a small global strategic car, also exhibited
at the 2012 Beijing International Automotive Exhibition


Developing and producing hybrid system components in China

Item When Description
Outline of the TMEC
R&D company
in November 2010
 In October 2011, Toyota announced an overview of Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC), an R&D function that was established in November 2010. With 100 percent equity participation by Toyota and US689 million investment, work is under way now to erect buildings and a large-scale test course in Changshu city, Jiangsu province. TMEC started operations in April 2011.
 R&D centers already in existence at two of Toyota's joint venture companies in China will focus on the development of vehicles. TMEC will be responsible for the development of cutting-edge component technologies. The three will cooperate in a "triangle" style to jointly strengthen automotive research and development activities in China. TMEC has 200 employees as of July 2011 with an eventual goal of 1,000 employees.
 Toyota is operating with the policy of localizing the development of vehicle models sold mainly in markets outside Japan. TMEC will play the central role in a phased shift to local development in China as Toyota does in the United States.
Localization of
hybrid components
Around 2015  Toyota plans to organize in TMEC a development team of hybrid vehicles to be produced in China, and launch vehicles fitted with hybrid components developed and produced in China in or around 2015. It is reported that production of certain parts will start in 2013 at the earliest.
Production of the
December 2011  Production of the third-generation Prius began at the Changchun plant of Sichuan FAW Toyota Motor Co., Ltd., a joint venture between Toyota and China FAW Group Corporation. The Prius was launched in February 2011 with a goal of selling 3,000 units a month. Main parts will be shipped from Japan for the time being until locally produced parts become available in phases.
China-only HV April 2012  The Yundong Shuangqing, a China-only hybrid vehicle, debuted to the world at the 2012 Beijing International Automotive Exhibition. The car is fitted with the hybrid components being developed by TMEC in Jiangsu.
PHV/EV 2013  Toyota will launch plug-in hybrid vehicles and EV in the Chinese market. Demonstration tests of the PHV/EV are currently under way in China.

Increasing the production of gasoline-fueled vehicles and powertrains

Item When Description
Production of
the AR engines
October 2011  Toyota's engine manufacturing company in China, GAC Toyota Engine Co., Ltd. (GTE), began production of the new inline four-cylinder AR engines. The company has capacities to produce 500,000 engines a year. Among the three types of AR engines, 2500cc, 2700cc and 2500cc hybrid, the 2500cc AR engine will be fitted in the new Camry. The company has invested US$96 million.
 The AR engines for use in China used to be produced at the Kamigo plant and exported from Japan. Toyota intends to increase cost competitiveness by making the engines locally in China.
Start of production
of the new Camry
December 2011  Production of the new Camry started at the Guangzhou plant jointly established with Guangqi Automobile Group. Toyota plans to add hybrid vehicles as well in 2012 with the series sales goal of 200,000 units combined a year. (Toyota started production of the previous Camry hybrid at the same plant in April 2010.)
Compact global
strategic cars
April 2012  Toyota's compact global strategic concepts, Toyota Dear Qin (sedan and hatchback), had world premieres at the 2012 Beijing International Automotive Exhibition. These cars reportedly will reach the market in 2013 at the earliest.
Changchun plant
starts operations
First half
of 2012
 Production of the Corolla started at Sichuan FAW Toyota Motor's new plant in Changchun. The new plant has an annual production capacity of 100,000 vehicles. (The existing plant in Changchun has an annual capacity of 10,000 vehicles and currently produces the Land Cruiser and the new Prius.)

Source: Toyota press releases 2011.10.21/2011.11.9/2011.12.19/2012.4.23


Asia other than China: Increasing production of powertrains as well as assembled cars

 As for areas in Asia other than China, Toyota is increasing production of assembled vehicles and powertrains in Thailand, Indonesia and India.

 In Thailand, Toyota will increase its assembled car production capacity from 650,000 to 760,000 units in mid-2013, and the engine production capacity from 740,000 to 840,000 units in early 2014. An additional 100,000 units will be produced entirely in Thailand by using locally-made components.

 In Indonesia, Toyota will build a second plant in Karawang with an annual capacity of 120,000 units in early 2014. Toyota's production capacity in Indonesia will rise from 110,000 to 230,000 units then (Toyota also receives supplies from Daihatsu.)

 In India, Toyota is investing 31.1 billion yen in total to double its assembled vehicle production capacity to 310,000 units in early 2013 (mainly by increasing production of the Etios). Toyota also has annual capacity increase plans for its powertrains. The company will produce 100,000 units of engines for the Etios starting in the fall of 2012, and 240,000 transmissions starting in early 2013.

Asia: Enhancing assembled vehicle production capacities

Country Description Investment
Thailand  Production capacity of the first Gateway plant in Thailand will be increased from 200,000 units in early 2012 to 220,000 units in May. The company will build a second Gateway plant to start production of the compact strategic cars (compliant with Thai government's preferential policy) in mid-2013 with an annual capacity of 70,000 units. The Gateway plant, two plants combined, will have an annual capacity of 290,000 units. 16.9 billion
 Thai Auto Works, once shut down at the end of May 2010, will resume operation by the end of 2012 after reconstructing its facilities. The plant will have an annual capacity of approximately 20,000 vehicles which likely will replace the same number of Toyota's commercial vehicle HIACE currently being imported from Japan. 2.9 billion
 (Note) Toyota plans to introduce the commercial vehicle HIACE in India and Indonesia as well.
 Toyota's annual production capacity in Thailand will be 760,000 units by mid-2013 including 230,000 units at the Samrong plant, 290,000 at Gateway plant, 220,000 at Banpo plant, and 20,000 at Thai Auto Works.
Indonesia  Toyota is building a second plant in Karawang and will start producing "new models" in early 2013 with an annual capacity of 70,000 units. The capacity will be increased further to 120,000 units in early 2014 when Toyota's capacity in Indonesia will be 230,000 units including 110,000 units at the first plant in Karawang (Toyota is also receiving supplies from Daihatsu in Indonesia and received 230,000 units in FY2011). The company is studying the feasibility of increasing exports to neighboring countries. 41.3 billion
 In April 2012, Toyota launched the new Camry and Camry hybrid imported from Thailand. This will mark the first time ever for Toyota to introduce hybrid vehicles in Indonesia.
India  In December 2010, production of the Etios (sedan) started at the second plant of Toyota Kirloskar Motor Pvt. (TKM). It was followed by the production of the Etios Liva (hatchback) in June 2011.
 The production capacity of TKM in India will be increased from 160,000 vehicles as of July 2011 to 210,000 units in the first half of 2012 (90,000 units at the first plant, 120,000 units at the second plant). 4.9 billion
 Export of the Etios to South Africa began in April 2012 with plans to export 20,000 units a year.
 TKM's production capacity will be increased to 310,000 units in early 2013 (100,000 units at the first plant where the Innova and the Fortuner are produced, and 210,000 units at the second plant where the Etios, Etios Liva and Corolla are produced). 17.2 billion
Taiwan  Toyota began production of the Camry Hybrid in February 2012 at the Kuanying plant in Taiwan. This marks the seventh plant where hybrid vehicles are produced outside Japan. Toyota plans to sell 7,000 units a year in Taiwan. 100 million

Increasing powertrain production

Thailand  Production capacity of the ZR engines (1600cc and 1800cc) fitted in the Corolla-series cars at an engine plant, Siam Toyota Manufacturing (STM), will be increased from 740,000 units to 840,000 units in early 2014 and the engines will be exported to Vietnam and Taiwan as well. (The current capacity of 740,000 units is assembled using parts shipped from Japan and this will continue through the future. The additional 100,000 units will be produced in Thailand using local parts.) 14 billion
India  A new plant is being built in Toyota Kirloskar Auto Parts Private (TKAP), Toyota's unit production company in India, to produce 100,000 engines starting in the fall of 2012 and 240,000 transmissions a year for the Etios starting in early 2013. TKAP is one of Toyota's production and supply bases of manual transmissions in the IMV project. 9 billion

Source: Toyota press releases 2011.7.27/2012.1.17/2012.2.16/2012.2.29/2012.4.4


Other areas: Increasing production in Russia and South America, starting KD production in Egypt

 Toyota has been producing the Camry in Russia since the end of 2007. The single-shift production of 20,000 units a year will be increased in September 2012 to a two-shift production of 50,000 units.

 As for South America, the production capacity of the IMV series at the Argentine plant was increased in November 2011 from 65,000 to 92,000 units a year. Production of the newly-developed compact cars will start at a new plant in Brazil in the second half of 2012 with an annual capacity of 70,000 units.

 In Egypt, knockdown production of the Fortuner SUV began in April 2012.

Enhancing production in Russia

St. Petersburg plant  Toyota built a new plant in the city of St. Petersburg in Russia and production of the Camry began in December 2007. The plant has facilities for welding, painting and assembling and is producing 20,000 units against an annual capacity of 50,000 cars.
 In April 2012, Toyota announced that a two-shift operation will start in September 2012 after hiring 600 new workers. The plant will have 1,750 workers in total when two-shift production starts with an annual capacity of 50,000 cars (8,000 units of Camry were exported from Japan in 2011 to fill the shortage but all will be supplied locally after two-shift operation starts).
 A decision was made in February 2012 to add the stamping and molding facilities to the Russian plant (currently the plant is receiving supplies of stamped and molded parts from Japan). Toyota will invest 7 billion yen and new operation is to start in 2014.
Joint production
with Sollers
 Toyota reached an agreement to assemble the Land Cruiser Prado at a plant built jointly by Sollers and Mitsui and Co., Ltd., located in the city of Vladivostok. Toyota was to supply parts to assemble about 1,000 units a month starting in the spring of 2012, and sell them on Toyota's sales channels.
 But the start of production was postponed from the end of 2012 to early 2013 due to a delay in the facility preparation.

Source: Toyota press releases 2011.3.1/2012.2.2/2012.4.20, Nikkan Kogyo Newspaper 2012.2.3


Increasing production in South America, starting KD production in Egypt

Argentina  In November 2011, Toyota invested US$126 million in the Argentine plant to increase an annual production capacity from 65,000 to 92,000 units of Hilux and Fortuner in the IMV series. The company used to export about 70 percent of production to 10 countries in Latin America including Brazil. The percentage will be increased to 75 percent.
Brazil  Starting in the second half of 2012, Toyota will produce 70,000 units a year of the newly-developed compact car (based on the Etios launched in India) at a new plant in Brazil. The plan costs US$600 million in total and will hire 1,500 new workers.
 The existing plant in Indaiatuba is producing the Corolla with an annual capacity of 70,000 units.
Egypt  In April 2012, Toyota's joint venture company in Egypt, Toyota Motor Engineering Egypt, celebrated the line-off of the Fortuner SUV at the plant operated by Arab American Vehicle Co. that assembles Toyota vehicles. The plant will assemble about 3,000 units (knockdown) a year.

Source: Toyota press releases 2010.9.9/2011.12.16/2012.4.9

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