Toyota Motor (TM) has released its plan to raise production in the U.S. for its pickup trucks as well as fuel-efficient cars by the end of 2009. A recovery in the housing sector and an immense demand generated by the Cash for Clunkers program are the key factors behind the increase in production.
Toyota ’s full-sized pickup truck Tundra and mid-sized pickup truck Tacoma saw excellent sales in August. Tundra had its best monthly sales of the year at 7,872 units. Meanwhile, Tacoma sales were up 5% year-over-year to 12,547 units. The increase suggested an improvement in housing demand, as pickups are essentials in the construction industry.
Toyota will raise manufacturing capacity of the Tacoma at a California plant. In the meantime, Tacoma production will be shifted to San Antonio, Texas (where Tundra pickups are produced) to ease the transition. Over the coming months, production of Tundra pickups will be boosted as well.
In addition to truck production, Toyota aims to push up its output for fuel-efficient vehicles such as Camry, Corolla, Prius and RAV4 to support an 11-day supply of vehicles for dealers from the ongoing low of a 3-day supply. According to Bob Carter, group Vice President and General Manager of the division, the company would raise its average deliveries to dealers by about 43,000 vehicles per month over its rates from the summer from September through November.
The recently ended Cash for Clunkers program strengthened the demand for Toyota’s fuel-efficient vehicles in the U.S. The program, launched by the U.S. government in late July, allowed consumers to trade in their old gas-guzzling cars and trucks with a mileage of 18 miles per gallon or less for a value of up to $3,500–$4,500.
Toyota dominated the program, featuring as many as 3 models among the top 10 buys under Cash for Clunkers. These are Toyota Corolla (ranked first), Toyota Camry (ranked third) and Toyota Prius (ranked seventh). In terms of market share, Toyota led with 19.4% of all Clunker sales.
We continue to recommend the shares of Toyota as Neutral.
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