Toyota has been taking quite a bruising this year. No, the company's misfortunes are not as bad as what Chrysler LLC, the Ford Motor Company, and what General Motors Corporation have been experiencing over the past few years, but the company has found itself in an uncharacteristically odd position: they are not building the cars that people want.
All right, that statement is a bit of an exaggeration on my part, but not completely. Toyota does build some very fine quality vehicles – their Lexus luxury brand has been on the top of the JD Power and Associates consumer satisfaction survey for fourteen consecutive years – but the company is not keeping up with demand for its hybrid Toyota Prius model. Worse, the automaker has been following the lead of GM, Ford, and Chrysler by expanding its market to big trucks and SUVs, two segments of the auto industry which have fallen on hard times.
Most amazing about Toyota is that the company built its reputation on producing class leading high quality small and midsize cars. Toyota threw down the gauntlet for what consumers want when it comes to the smallest of transportation, 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 US Sales will be down 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 does now in America.
Among the changes for Toyota:
Halting Tundra production: Toyota's largest truck, the Tundra, was being built at two plants, but production has now been shifted to one plant. At that single plant, production of the Tundra has been temporarily halted as the automaker seeks to shrink swelling inventories.
Upping Yaris and Corolla capacity: Toyota has already initiated a plan where the company will increase its production of two compact cars by 40,000 units. These increases should start to take place by October.
Bringing the Prius stateside: Up until now, the Toyota Prius hybrid was built exclusively in Japan, but the automaker plans to expand capacity to keep up with demand. The company's Mississippi plant will shift Highlander SUV production to Indiana, giving it the room to build the Prius.
Perhaps the most telling thing about these changes is that they'll be implemented very quickly, allowing Toyota to be ready when the market picks up again. Toyota will not be abandoning the pickup truck and SUV segments with these changes, instead the company will be able to adjust much more quickly to moving consumer demands in the future.