Toyota Sees Potential for Exporting US Trucks
Toyota Motor is considering exporting U.S.-made trucks including its full-size Tundra after scaling back its sales expectations for the U.S. market under pressure from record fuel prices and a slumping housing market.
Toyota's U.S. manufacturing chief also said Toyota could cut more temporary U.S. manufacturing jobs if the U.S. auto industry downturn deepens, as it has cut U.S. truck production amid a collapse in demand for the once-popular, gasoline-thirsty vehicles.
Toyota , now No. 2 in U.S. sales behind General Motors , is facing the unprecedented problem of excess capacity in the U.S. market as demand for large vehicles like its Tundra pickups and Sequoia SUVs tumbled while fuel prices surged.
The automaker is also contending with a strong yen, which eats into profits earned abroad when foreign currencies are converted into the Japanese currency.
Steve St. Angelo, senior vice president of Toyota Motor Engineering and Manufacturing in North America, said at an industry forum that the automaker was evaluating the idea of exporting the Tundra and Sequoia, now exclusively built in the U.S. market.
Better-selling cars such as the Camry and the Corolla are not part of that consideration because Toyota "cannot build the cars any faster than right now in the United States," a Toyota spokesman said later.
Toyota, which has 100 days of supply for the Tundra, faces a deepening supply shortage of cars and hybrids.
Toyota has already cut about 500 temporary jobs in the United States this year and sees the possibility of additional reductions depending on "fluctuation in the market," St. Angelo told Reuters on the sidelines of the forum.
Temporary workers account for 10 percent of Toyota's 30,000-member U.S. manufacturing work force.
Toyota had called the Tundra its most important vehicle launch ever and opened a $1.2 billion plant in San Antonio, Texas, last year to build it. However, plummeting sales have forced Toyota to suspend truck production for three months beginning this month.
St. Angelo said Toyota is considering measures to minimize work force reductions, such as relocation of workers at plants producing larger vehicles to its Georgetown, Kentucky, plant, which builds better-selling, better-mileage cars such as the Camry, Avalon and Solara.
Toyota's U.S. sales fell 7.6 percent year-to-date through the end of July, with a 15 percent drop in truck sales.
Hit by a demand meltdown for pickups and large SUVs, Toyota cut its 2008 U.S. sales forecast to 2.44 million vehicles from 2.64 million. The new projection would represent a 7 percent fall from 2007.
The deeper-than-expected downturn in U.S. industrywide sales has already forced automakers including GM, Ford Motor and Nissan Motor to reduce truck production and lay off thousands of factory workers.
To respond to fast-chancing consumer needs, Toyota last month announced a major overhaul of its U.S. manufacturing plans to shift to more fuel-efficient cars.
It now plans to build its Prius hybrid, instead of the Highlander SUV, from 2010 at a factory under construction in Mississippi. Toyota also suspended production of slow-selling big trucks -- Tundras and Sequoias in the United States -- for three months starting Friday.
Toyota is still looking to resume truck production in early November, but it is hard to predict the exact timing due to volatile gasoline prices, which have prompted a consumer defection from trucks and SUVs, St. Angelo said.