Toyota considers new U.S. plant


As Japan's leading carmaker, Toyota wins a large share of sales in the U.S. market

By Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan (CNN) -- Toyota Motor Corp. is considering another factory in the United States, the company confirmed Monday.

It would be the company's fifth North American assembly plant. But the company stressed Monday that no timeline has been set.

Toyota was responding to remarks from President Fujio Cho during a visit to New York on Friday.

"If things unfold as planned, we'll be in need of another plant," Cho said, according to the Wall Street Journal. He was in New York to speak to analysts and investors.

A spokesman said Monday that the factory is a "medium-term plan."

"If we can sell more than 2 million consistently then we may need a new plant, that's what he really meant," Shigeru Hayakawa told CNN. "Nothing has been decided at all."

Target of 2 million by 2004

The company has set itself a target of selling 2 million vehicles in North America by 2003 or 2004. It is already approaching that level.

But Hayakawa denied a team is already studying options for a site.

"If in the mid-term the market continues to increase and we can sell more, we may think about building another plant," he said.

"We have been studying the possibilities from various aspects. It is a mid-term to long-term plan," he added.

The United States is an increasingly important market for Japan's largest carmaker. It sold 1.87 million cars in 2001, and sales are up 3 percent through the first seven months of 2002.

The company makes more than 50 percent of the cars locally. North American sales accounted for 21 percent of the company's 5.14 million cars produced in 2001.

U.S. consumers still buying

Toyota aims to corner 15 percent of the world car market by 2010, up from around 10 percent now.

Despite the global slowdown, U.S. consumers continue to buy cars in large numbers.

Light-vehicle sales hit 1.7 million units in the United States in August, up 13.5 percent over a year ago, thanks in part to incentives from dealerships. That's off October's record rate but still an improvement on July.

Economists will be watching to see the rate of growth in the United States. Some experts suggest the incentive-driven car buying may come at a cost to sales down the line.

But more production from Toyota would heap pressure on the "Big Three" U.S. car companies, General Motors, Ford Motor and DaimlerChrysler.

By some estimates, U.S. carmaking capacity exceeds demand by around 20 percent.

Toyota stock ended the morning session up 2.78 percent at 2955 yen on Monday. That's outperforming the Nikkei's 2.33 percent rise and a 1.92 percent lift in the Topix.