Toyota to Cut Truck Production

By Brendan Moore

03.14.2008
Toyota is planning to slow down Tundra and Sequoia production in late spring at its Indiana and Texas manufacturing plants.
Even mighty Toyota is not immune to the same economic forces buffeting all the auto companies – with the economy in a recession and gasoline reaching record prices, the demand for full-size trucks (Tundra) and full-size SUVs (Sequoia) has tapered off considerably. Full-size truck sales in the U.S. declined 103,558 in the first two months of 2008 compared to the same two months in 2007.
Therefore Toyota has made the decision to pinch off some production on a temporary basis in order to better match supply to demand. Toyota stated the slowdown will occur this spring and emphasized that there would be no layoffs as a result; the line workers will simply make fewer vehicles per hour in their respective plants.
The Sienna minivan, which is also built in the Indiana plant on a separate line, is unaffected by the slowdown plan.
Here’s an example of the math Toyota is up against: The Texas plant in San Antonio, which is only part of the Tundra production, can push out about 25,000 Tundras a month. Total U.S. sales of the Tundra last month were 14,400.
We’re producing the vehicle based on customer demand,” said Victor Vanov, a spokesman for Toyota’s North American manufacturing arm. Vanov said that demand has slowed due to “fuel prices, [and] the whole economic shake-out.”
Toyota cannot be happy, as they had very high hopes for the Tundra in terms of sales, but it’s not as if consumers have singled out the Tundra for poor treatment; full-size pickups are really taking it on the chin in the current economic environment. It could be a very bad year for pickup sales.
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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. THe Tundra is a great truck and will do just fine as the economy comes back. I wouldn’t bet against Toyota in any market segment.

  2. Having the Tundra launched with a optionnal turbo-diesel engine or a flex-fuel version to use E85, things could had been different and the quality problemes at the Tundra launch didn’t helped things either.

    Another problem then the Tundra bring is the image of gas-guzzler and dent the “green image” of Toyota and some critics are now intrigued by this move (I could compare with the launch of the last-gen Chrysler C-bodies Newport/New Yorker/Imperial/Dodge Monaco/Plymouth Gran Fury during the first oil crisis of 1973-74).

    With the agreement between Nissan and Chrysler to sold the Nissan Versa as Chrysler Versa for South America. There was once a rumor of more depper talks like a rebodied Dodge Ram to be sold as a Nissan Titan. If that rumor isn’t a rumor anymore and became a reality, could we imagine Toyota asking ….GM for a plan similar to that probable Nissan-Chrysler plan?

  3. Truck buyers are notoriously brand loyal, at least for those who buy a truck to haul or tow stuff as opposed to people who buy trucks as a car.

    If Ford actually delivers on their promise of a small diesel for next year’s F-150, expect F-150 sales to do very well, although they will probably cannibalize F-250 sales.

  4. No one is going to miss the Toyota Tundras or the Toyota Sequoias that are not produced.

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