The Wall Street Journal [sub] reports some unsurprising news: "Toyota Motor Corp. is likely to struggle to make money at its two truck plants in the U.S. this year." The $2b San Antonio plant ran at about 92 percent of capacity last year. This year, it's limping along at 72 percent. Its sister truck/SUV factory in Indiana is said to be at a Chrysler-like 45 percent. Thanks to its flexible labor (i.e. non-union), Toyota has already re-assigned Indiana workers from the truck line to Camrys. Both Toyota truck factories are also cutting work hours: "Workers on each shift will work seven hours instead of eight assembling cars and will spend one hour in training." No layoffs, no jobs bank and no 95 percent pay for not showing up. Meanwhile, the car side of Toyota's portfolio remains strong and continues to gain share against Detroit. The Tundra is down, but Prius, Camry, Corolla and Yaris are rocking and rolling out the door.
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Wow!! TOYOTA made a timing error!! Actually, their foray into full size pickups has been fraught with errors. Too wimpy, too small, then sized right, then recalls, major failures…rebates, slow sales…now “Detroit” problems….but at least they still have a well rounded portfolio so they can fall back onto their well designed cars. I guess errors are not just a Detroit thing but don’t count on hearing much about it from the CR crowd.
This is what kills me about the fan-boy sites. They would be all excited about Toyota’s troubles with the Tundra without recongizing the company’s ability to 1) sustain itself without the success of any one model and 2) ability to adapt quickly to a changing market. Bottom line is Toyota can do things GM, Ford and Detroit only dream of and make money (lots of it) doing so. Keep in mind GM fans, whatever incentives Toyota chooses to put on the hood of the Tundra, it can absorb those costs, while GM cannot afford to play that game.
Someone should call Toyota out on giving 4-speed autos to Corolla/Matrix/Yaris instead of telling us the obvious.
Someone needed to crack the Truck / BOF SUV market and Toyota and Nissan did so. Their trucks and SUVs are decent – reliable if not “strong enough in image” in their first generations. People will still need to buy pickups in the future even with $5 a gallon gasoline but all the city slicker and poser pickup / BOF SUV owners now leaving the scene as they can’t afford to have the “tough” image anymore – trucks should go back to what they were…utilitarian appliances with work truck specs.
But here’s the beauty in Toyota’s system…the factories do not take > 1 year to switch over from an BOF SUV / truck to a car nor do the workers get 95% of their pay for doing nothing…flexibility that D2.8 don’t have b/c of mismanagement and greed from all parties.
I, for one, was not at all happy with Toyota’s “supersizing” of the Tundra and Tacoma. In fact, the only truck I would consider getting to replace my ’66 F-100 is an older T-100 with the 2.7 four. They’re very hard to come by; professional landscapers, etc. love them. They can haul a load, and get 20+ mpg easily.
Toyota walked away from a nice niche in the market that would sell well right now.
From fueleconomy.gov, the Big T’s 4AT disadvantage. Methinks Toyota is laughing all the way to the bank (as usual), saving money by not putting in an extra cog or CVT with their smaller engines, and still managing to meet or beat the competition’s MPG.
Yaris 1.5 4AT: 29/35
Corolla 1.8 4AT: 27/35
Matrix 1.8 4AT: 25/31
Corolla 2.4 5AT: 22/30
Matrix 2.4 5AT: 21/29
And the competition:
Fit 1.5 5AT: 27/34
Versa 1.8 CVT: 27/33
Civic 1.8 5AT: 25/36
Sentra 2.0 CVT: 25/32
Focus 2.0 4AT: 24/33
Versa 1.8 4AT: 24/32
Astra 1.8 4AT: 24/30
Aveo 1.6 4AT: 23/32
Mazda3 2.0 4AT: 23/31
Caliber 2.0 CVT: 23/27
Mazda3 2.3 5AT: 22/29
Cobalt 2.2 4AT: 22/31
Rabbit 2.5 6AT: 21/29
The gas powered Yaris is totally meh. How about a full electric version to compete with the MiEV? Or a full electric option on the Prius to compete with a full electric Volt?
I’m looking for a new vehicle that doesn’t burn stuff.
If Tesla’s were available; what would the monthly payment be like?
Hey Paul Niedermeyer,
I just looked at the specs for the current Tacoma. It is the T100 re-incarnate, & available with a 2.7 four!
I just wanted to point out that the inflexible Ford with the dead-weight UAW has eliminated a shift at KC truck and added a shift to the Escape production so that no ends up on the street and Ford can meet demand of the vehicle. It’s not all bad news and proves that Detroit can work with the UAW when the need arises.
I feel it is also incumbent upon me to remind you that Toyota brand (and Scion, because Toyota counts both together) cars while stealing share of the overall pie of light vehicle sales have not grown as fast as Ford brand cars this year (1.4% vs 2.8%). Ford has also grown their share relative to Toyota in the C and CD segments. Without the Crown Vic, which is fleet only this year, Ford’s growth in cars is 6.1% and has grown in the D segment relative to Toyota. Most cars are stealing industry share. Ford is stealing share at a faster rate than most – it just can’t make up for the sheer volume of their trucks.
As I wrote in another thread, the Tundra is my major disappointment with Toyota. A classic “answer to a question no one is going to ask anymore.”
Their green image doesn’t compute well with that kind of going for a segment mentality, when all indicators point to the segment doing dead cat bounces. Let those bounces fool Wagoner and Lutz – that they fooled Toyota was a let-down, and I’m not surprised that they are short a mess of yards on this.
Carmakers need to hone and pursue their segments with the dedication and skill of Porsche and Honda – competition is such that you can’t be an all-over-the-place carmaker any longer, that simply dilutes your efforts (and your thinking) too much.
Probably good for Toyota to get a wake up call, they could have spent their profit with more wisdom.
Stein X Leikanger :
As I wrote in another thread, the Tundra is my major disappointment with Toyota. A classic “answer to a question no one is going to ask anymore.”
Let those bounces fool Wagoner and Lutz – that they fooled Toyota was a let-down, and I’m not surprised that they are short a mess of yards on this.
I am vastly more disappointed with the super-sized Tacoma. It seems Dodge and their “merry-go-round” commercial about “toys” got Toyotas’ goat, and Toyota decided to play the Dodge game, rather than stick with a game they were doing well with. Why Toyota felt it had to follow the Dakota is beyond me.
As for the Tundra, hopefully we will see a disappearance of the huge chrome nose rings that Dodge and Toyota are currently featuring. But, I suspect the Tundra will become a fixture at Toyota dealers. It may not be the seller they once envisioned, but I expect it will eventually turn a nice profit. Pickups are definitely an area I would welcome de-contenting – leather? nope. Carpet? nope. power adjustable seats? nope. Hoseable interiors? Yep.
As for Toyota being fooled, I don’t buy it. Regrettable timing, sure. But, the SA factory had to be planned several years in advance, and nobody really expected the sub-prime/banking meltdown.
But, perhaps they should have:
HW was involved in a gulf war.
Dubya – oops, that isn’t going so well.
HW oversaw the saving & load meltdown, with son Neil Bush front and center.
Dubya – oops. The sub-prime meltdown isn’t so great. At least Neil seems to be absent!
HW had economic problems.
Dubya – hey, what’s a little deficit spending (NINE TRILLION dollars and counting) among friends?
Yeah, ok, shame on Toyota for not seeing the parallels. :-)
Bruce
Maybe y’all watch more tv than I do, or maybe I was at the fridge when the commercials were on, but I don’t really see the fuss over Toyota’s “green image.”
In my experience, when people think Toyota, they think reliable. Warlords drive 4-cyl Toyota trucks, and cheapskate engineers drive 300,000 mile corollas and camrys.
As for knowing their niche or defining their segment, the goal is for you to want a Toyota no matter what kind of car you want. Want the most reliable (and therefore cheapest to run) penalty box? Think Yaris. Reliable, cheap “real” car: Corolla. Reliable family car that won’t burn you at trade-in time: camry. etc etc etc.
near as I can tell, “green” is internet banter and watercooler talk. CHEAP is what sells cars. Some people fall for cheap out-the-door prices and buy GM. Others crunch the numbers and calculate repair cost, time value lost due to repair inconvenience and use of vacation/leave time, and depreciation. For those for whom cheapness is a way of life, Toyota has your car.
Me? I’m retarded and bought Germany’s GM, although I do like my VW.
I suspect there is a market for subcompact pickup trucks, like the ones Toyota and Isuzu made in the 80’s…
God knows my family got a lot of use out of the ’85 Isuzu P’up we had.
The worst part for Toyota??
They still have a new Canada plant coming online this year for the RAV4 and a new Mississippi plant coming online next year for Highlander.
Overcapacity is an understatement. Ouch. Its looking more and more like San Antonio probably should never have happened as Princeton could have probably produced all the Sequoia, Sienna, and Tundra units Toyota would need. Now they’re adding two more plants? For trucks?
They’re going to need that capacity when some of their competition goes ch11
Look at it this way, as we learned last week in the “Mayday!” editorial comments, people that are purchasing the smaller and mid-size cars off the Toyota lot are going to feel fantastic that Toyota has full-size trucks with V8’s on the lot. This is regardless of whether or not they are selling. Remember, everyone feels better when they purchase from a “full-line” automaker that offers a V8, and they are taken seriously in the auto market. It’s apparently all about image, right?
Doom and Gloomers unite… but not just yet.
To begin with, lets get over the bad timing on the Tundra b.s. It was time for an update, and by doing so they’ve moved about 100,000 more units and picked up market share. They would be selling about as well as Nissan Titans right now had they not updated the Tundra. Furtehrmore, the truck, while larger, only hurts Toyota’s green image in the eyes of negative bloggers. People buying Priuses and Yarises dont give a damn about the Tundra and its perceived image killing. And dont forget that the larger, more powerful Tundra gets the same mileage as the last smaller, slower, less powerful model.
As for the plant slowdown, Toyota needs the San Antonio plant. For many reasons. First, the goodwill they have engendered by opening a truck plant in Texas is priceless. Second, there is no way they could have sold an extra 100,000 Tundras last year with the Princeton plant. Third, now that Camrys are not being made fast enough, Princeton can handle more of the production, so Tundras and Sequoias can be shifted to San Antonio. Fourth, Toyota has long term vision. For them to be number one in the US, and it will happen (they came withing 15,000 units last month) they need a full line of pickups, including diesels and HDs. San Antonio may not be pumping those out now, but when the market rebounds it will be ready to.
An hour of training a day to fill in the dead time? Definitely the way to go.
The deeper the recession, the stronger Toyota becomes.
Toyota is one of the few AAA rated corporations (I’m talking about credit rating here and not the auto club). At the end of the day, when others are belly up, Toyota will be just fine.
WSJ is always taking cheap shots at Toyota. I firmly believe it is a union issue. WSJ journalist are unionized and they are supporting their fellow union with attacks on Toyota.
I disagree with WSJ and TWAC. In order to increase profits and market share Toyota developed the new Tundra and created the Sienna and Sequoia. This is sound basic business principal to increase their businesses. Every full line OEM is suffering from high fuel prices and slumping economy.
WSJ article is just another cheap shot at Toyota.
carlisimo> agreed. If this was GM they’d be doing crossword puzzles.