Toyota
This third assembly line will be added to the company’s plant in Guangzhou, China. Production of the line is slated to begin in 2017 with a capacity of 100,000 vehicles.
No mention was made about what model would be built on this new line.
Currently, the Guangzhou plant has two lines, operated with Toyota’s local joint venture partner, Guangzhou Automobile Group Corporation. These have an annual capacity of 360,000 units, and produce the Highlander SUV, Camry Sedan, and Yaris small car, among others.
The new assembly line will lift Toyota’s total capacity in China to 1.1 million units. Last year, its five plants in China produced 960,000 units.
The expansion of the company in China keeps pace with similar manufacturing plans of its rivals despite slowing of overall sales growth. Hyundai has opened its fourth plant in China this year, and will begin construction of its fifth later this year.
“If you’re an auto company planning for the future, you have to build in China,” state Kurt Sanger, an auto analyst with Deutsche Securities Japan.
Toyota has also announced its plans for a $1 billion plant in Guanajuato, Mexico, that will assemble the next-generation Corolla small car. Slated to open in 2019, it will produce 200,000 vehicles a year.
These latest expansions in China and Mexico will deploy low-cost manufacturing processes and handle the company’s new modular platforms. Together, they will boost the company’s global capacity by 300,000 vehicles a year, from 9.8 million units. This would also give the company more wiggle room on a tight global utilisation rate that pushes 90 percent, up from the 70 percent in 2009.
Global shift
The factory blitz is part of a global shift in the automaker's manufacturing strategy aimed at cutting the resources needed to produce new vehicles by 20 percent. The effort includes developing a new generation of platforms that will underpin half of Toyota's lineup by 2020.
It breaks the three-year "intentional pause" on greenfield sites ordered in April 2013 by President Akio Toyoda. During the moratorium, Toyota eked out more capacity from existing plants, while laying the groundwork for the new modular vehicle platform and efficient manufacturing processes. The goal: Take a breather to focus on lowering costs and improving quality.
The company’s effort, dubbed Toyota New Global Architecture, groups the production of similarly sized vehicles together. It is similar to modular platforms used by Volkswagen Group and Renault-Nissan Alliance.
By increasing the number of shared parts and simplifying the manufacturing process, the company expects to cut the investment needed for a new production line in half, and the costs of building a new plant like the one in Guanajuato by 40 percent.
"The competitiveness will increase by leaps and bounds," said a Toyota manager involved with the expansion. "We want to make qualitative as well as quantitative improvements."
These announcements show Toyota was working hard behind the scenes during its pause, said Kurt Sanger, an auto analyst with Deutsche Securities Japan. "They were not just sitting on their thumbs," he said. "They are changing their way of production."
A Toyota official said they picked Mexico and China as sites because North America and China are expected to see sustainable growth in the long term.
