Toyota 2005 Annual Report Download - page 43

BUSINESS OVERVIEW >41
In production, the plant in Mexico started
up, while the plant in Alabama bolstered its
engine production capacity.
MARKET STRATEGY
Pioneer new markets to widen
customer base
Aiming to make the most of ongoing growth in
the promising North American market, we will
expand operations by fortifying local produc-
tion capacity and product lineups. The Texas
plant, coming on stream in 2006, and the
second assembly plant in Canada, scheduled to
start-up in 2008, will increase local production
capacity to 1.81 million vehicles. Toyota also
wants to strengthen local product development
capabilities. Therefore, we have scheduled
spring 2006 to break ground for new facilities
that will enlarge the Michigan research and
development center.
Toyota’s growth strategy in North America is
to carve out three new markets: the hybrid
vehicle market, the full-size pickup truck
market, and the youth market. Steadily adding
to its stable of hybrids, Toyota introduced an
SUV hybrid, the Lexus RX, in April 2005. Also,
in the second half of 2006 local production of a
hybrid Camry is scheduled to begin at the
Kentucky plant. In 2006, the Tundra full-size
pickup truck will start rolling off the line at the
new Texas plant, supplementing current produc-
tion in Indiana. Premiered nationally during
fiscal 2005 to target Generation Y, the Scion
project is successfully broadening Toyota’s
appeal, with first-time customers accounting
for roughly 80% of Scion-marque sales.
Expand Local Production Capacity
to 1.81* Million by 2008
Annual Vehicle Production Capacity in North America
(Thousands of units)
1. Canada (TMMC) 250
2. Kentucky (TMMK) 500
3. Indiana (TMMI) 300
4. California (NUMMI)** 400
5. Mexico (TMMBC) 30
(started up December 2004)
6. Texas (TMMTX) 200
(scheduled for 2006 start-up)
7. Canada No. 2 plant (TMMC) 100
(scheduled for 2008 start-up)
* The Company plans to fill the 30,000-vehicle gap
relative to total plant production capacity by enhanc-
ing efficiency and personnel at existing plants.
** The California plant is a Toyota-General Motors
joint venture company that is accounted for using the
equity method. Production capacity figures include
vehicles for General Motors.
Note: Please see the Overseas Manufacturing
Companies section on page 124 for full plant names.
Key Focuses: Hybrids,
Full-Size Pickup Trucks, and Scion
Growth Strategy in North America
Enhance lineup of
hybrid vehicles
Strengthen
measures targeting
young people:
Develop Scion
throughout the U.S.
Make full-scale
entry into
full-sized
truck market
2006:
begin production
at Texas plant
Scion Project Begins in Earnest
We initiated the Scion project to attract
Generation Y customers. In July 2004,
building on the buzz created by the
earlier launches of the xA and the xB in
California, we added the tC and began
full-scale marketing of Scion-marque vehicles through more than 700
dealers across the United States. The models are proving highly popular
thanks to Internet-based marketing techniques and to a system that
enables customers to order cars according to their own specifications by
freely combining 40 or more different parts and accessories.
Pickup Truck Production Started in Mexico
Our plant in Mexico, TMMBC, began building truck beds for the
Tacoma in September 2004 and quickly progressed to the production of
finished vehicles in December. Capable of rolling out 30,000 vehicles
and 180,000 truck beds a year, the plant
ships truck beds to the Tacoma line at
the Toyota-General Motors joint-
venture plant in California.