Toyota will stop importing compact pickup trucks from Japan this fall and probably expand truck production at the Fremont, Calif., assembly plant it shares with General Motors.
It is the latest step by a Japanese automaker to take advantage of a chronically weak U.S. dollar that has made it less costly to build cars and trucks in North America.With the dollar now worth about 100 yen, compared to 250 yen a decade ago, the cost of Japanese labor and raw materials is becoming non-competitive. The shift also will allow Toyota to avoid the 25 percent tariff the U.S. government levies on imported trucks.
Shifting production to the United States will cause a new problem: Americans are buying more Toyota pickups than the New United Motor Manufacturing plant southeast of San Francisco can possibly build.
Last year, for example, Toyota sold about 182,000 trucks - 116,000 built at NUMMI and 66,000 imported from Japan. Running flat out, NUMMI can only build about 130,000 trucks a year.
Michael Damer, a spokesman for NUMMI, said there are no plans to expand the NUMMI plant, which also produces the Geo Prizm and Toyota Corolla compact sedans.
Industry analysts say Wednesday's announcement may be a ploy to get California to ease environmental regulations that would make an expansion less expensive. Strict protection of exotic wildlife and extremely demanding industrial emission standards have caused most automakers to steer clear of major investments in California.
"They're are going to spend $200 million to add 120,000 units a year," said Steve Kosowski, a product analyst with AutoPacific Group in Santa Ana, Calif.