Three-Year Toyota Building Freeze to End
Three years ago, Toyota announced a building freeze after a long period of expansion. The freeze, which was originally set to run through March 2016, will come to an early end, according to reports from “people familiar with the matter,” says the Wall Street Journal. This information coincides with that which was originally leaked back in January, and will involve the building and expansion of plants in both China and Mexico.
Reports state that Toyota will invest a total of $1.25 billion on factories in the two countries. The plants, which would begin operations around 2018 or 2019, will help increase Toyota’s production capacity by hundreds of thousands of vehicles.
The freeze was introduced by president Akio Toyoda in 2012, after the automaker went through a phase of rapid expansion which left its plants with excess capacity and high fixed costs. Now, with demand on the rise once again, Toyota plants are once again running at full capacity, hence the need for an expansion.
In the three years since the freeze was introduced, Toyota has been working hard to find more efficient ways to build its vehicles, including laser welding machines and press equipment designed to help shorten production lines. Toyota is likely to introduce this technology at its existing plants over the next few years, as well as the new plants in Mexico and China.
Toyota’s plan for 2015 is to build 10.21 million vehicles worldwide, and sell 10.15 of those vehicles. It’s already been a successful first quarter here in the United States, but time will only tell whether or not this is a realistic plan.
News Source: Wall Street Journal