Toyota has been suffering quite a bit this year. No, the company’s misfortunes aren’t nearly as bad as those that Chrysler LLC, Ford Motor Company, and General Motors Corporation have been experiencing in recent years, but the company has found itself in an unusually strange position: They aren’t. building the cars people want.
Okay, that statement is a bit of an exaggeration on my part, but not entirely. Toyota builds some very good quality vehicles, its luxury brand Lexus has been at the top of the JD Power and Associates consumer satisfaction survey for fourteen years in a row, but the company is not keeping up with the demand for its model. hybrid Toyota Prius. Worse still, the automaker has been caught following the lead of GM, Ford and Chrysler by expanding its market to large trucks and SUVs, two auto industry segments that have seen tough times.
What’s most surprising about Toyota is that the company built its reputation on producing class-leading high-quality small and medium-size cars. Toyota launched the glove for what consumers want when it comes to the smallest haulage, setting the benchmark by which all other manufacturers are judged.
To get back on track, Toyota is making some very bold moves to reinvigorate its American presence. The company estimates that sales in the United States will decline by at least 5% this year, the first year-over-year decline since 1995, when the automaker sold less than half the number of vehicles it now sells in the United States.
Among the changes for Toyota:
Stopping Tundra production: Toyota’s largest pickup, the Tundra, was being built at two plants, but production has now moved to a single plant. At that single plant, production of the Tundra has been temporarily halted as the automaker seeks to reduce mounting inventories.
Yaris and Corolla Capacity Increase: Toyota has already started a plan in which the company will increase its production of two compact cars by 40,000 units. These increases should start to occur in October.
Bringing the Prius to America: Until now, the Toyota Prius hybrid has been made exclusively in Japan, but the automaker plans to expand capacity to keep up with demand. The company’s Mississippi plant will move Highlander SUV production to Indiana, giving it room to build the Prius.
Perhaps the most telling of these changes is that they will be implemented very quickly, allowing Toyota to be ready when the market recovers again. Toyota will not abandon the pickup truck and SUV segments with these changes, but rather the company will be able to adapt much more quickly to changing consumer demands in the future.