Toyota investing $1B in new TNGA plant in Mexico, realigning North American manufacturing; expansion in Guangzhou
Toyota is embarking on a multi-year plan to realign its manufacturing operations in North America in support of the Toyota New Global Architecture (TNGA) (earlier post), a comprehensive approach to achieving sustainable growth by making ever-better vehicles more efficiently. Toyota also announced an expansion of its joint venture plant, Guangzhou Toyota Motor Co., Ltd. (GTMC), in China (one of Toyota’s three assembly plants in China).
As part of this strategy, Toyota will invest approximately US$1 billion to construct its newest North American manufacturing facility in the state of Guanajuato in Central Mexico to produce the Corolla. The plant is the first designed from the ground up with TNGA production engineering technologies and will leverage the existing supply base and transportation infrastructure in the region. Toyota will also establish a plant preparation office in the state of Queretaro.
The new Guanajuato plant will begin producing the Corolla with Model Year 2020. The plant will be Toyota’s 15th in North America, its first new plant since 2011 and its largest investment in Mexico to date. It will have the capacity to produce 200,000 units annually. (Toyota’s other manufacturing plant in Mexico is Toyota Motor Manufacturing de Baja California (TMMBC), which builds Tacoma pickup trucks and Tacoma truck beds. The truck beds are used in production at TMMBC and at TMMTX in Texas.)
Once Corolla production begins in Mexico in 2019, Toyota Motor Manufacturing Canada Inc. (TMMC) will transform its Cambridge, Ontario North Plant to switch from producing Corollas to mid-sized, higher-value vehicles, marking Toyota’s first major reinvestment in the plant since it opened in 1997. Toyota will also make significant new investments over several years in TMMC’s assembly plants in Cambridge and Woodstock, Ontario to implement TNGA modifications, maintaining the facilities’ importance as a strategic manufacturing hub.
The Woodstock plant will continue to manufacture the RAV4, a vehicle competing in a rapidly growing segment. The Cambridge South Plant will continue to build the Lexus RX 350 and 450h, the newest models of which were recently unveiled.
By 2019, the Cambridge, Ontario plants will all be producing higher-value mid-sized vehicles, along with Toyota Motor Manufacturing, Kentucky, Inc. (TMMK) and Toyota Motor Manufacturing, Indiana, Inc. (TMMI). The new facility in Mexico and Toyota Motor Manufacturing, Mississippi, Inc. (TMMMS) will build the Corolla, consolidating compact vehicle production to the southern US and Mexico. These groupings by common vehicle platform follow Toyota’s consolidated truck production at its San Antonio, Texas and Baja California, Mexico plants, which has helped streamline Tacoma and Tundra assembly while better leveraging the supply chain.
These moves advance Toyota’s efforts under TNGA to group production by common vehicle platforms in each North American plant to improve efficiency and enhance flexibility.
Toyota intends for TNGA to boost vehicle quality and appeal while achieving cost savings through production engineering innovations, building more models on common platforms, the intelligent use of common parts and more fully leveraging Toyota’s supply chain.
Other recent manufacturing expansions by Toyota in North America include:
$360-million investment in Georgetown, Kentucky plant
$150-million investment in Huntsville, Alabama plant
CA$100-million investment in Toyota’s Cambridge, Ontario plant to introduce hybrid production and increase capacity
$100-million investment in Princeton, Indiana plant
$90-million investment at Buffalo, West Virginia plant
Substantial year-over-year increases in production volume at Toyota’s plants in Indiana, Mississippi, Texas, Canada, and Baja California, Mexico
Over the past 50 years, Toyota has built more than 25 million cars and trucks in North America, where its operates 14 manufacturing plants (10 in the US) and directly employ more than 42,000 people (more than 33,000 in the US). 1,800 North American dealerships (1,500 in the US) sold more than 2.67 million cars and trucks (more than 2.35 million in the US) in 2014; about 80% of all Toyota vehicles sold over the past 20 years are still on the road today.
Toyota Motor Engineering and Manufacturing North America, Inc. (TEMA), headquartered in Erlanger, KY., is responsible for Toyota’s engineering design, development, R&D and manufacturing activities in North America. TEMA’s Toyota Technical Center (TTC) operates engineering, research and development facilities in Ann Arbor, MI, including Toyota’s Collaborative Safety Research Center (CSRC).
Guangzhou Toyota. By restructuring its existing lines at GTMC and building an additional facility by the end of 2017, Toyota is preparing for future TNGA innovations and capacity increase. Toyota views it as vital to further improve the competitiveness of the existing lines and respond to future demand for stable growth in the Chinese market. At the same time, GTMC will collaborate with engineering, production and procurement on effective use of the existing supplier network and cost reduction activities at its R&D center.
GTMC will consolidate its vehicle production by vehicle size and pursue improvements based on the Toyota Production System (TPS) and increased automation, to realize higher quality and productivity.
Following the restructuring and resulting higher efficiencies of the existing lines, GTMC will operate all three lines with the current number of employees. A competitive new facility will be created by implementing productivity improvement activities conducted on the existing lines and new innovative production engineering technologies. At the same time, it will work on smart plant-building, effectively utilizing existing equipment that is adjacent to the current facilities.