This post first appeared on Tundraheadquarters.com
Toyota has recently announced its plans to invest $150 million at their Tijuana, Mexico facility to expand production of their mid-size truck, the Toyota Tacoma. This investment should relieve some of the capacity strain.
The investment will create around 400 jobs at the plant and increase capacity up to 160,000 by late 2017 or early 2018 when the expansion is expected to be completed. This will double the production at the facility which produced 82,000 units in 2015.
For Toyota, the decision to expand production is a no-brainer with the San Antonio plant producing trucks at 123 percent over capacity. Even after adding a unique third-shift strategy, Toyota simply can’t build enough Tacoma and Tundra models to meet demand. According to many company representatives I’ve spoken with, they think they are falling short by about 20 percent. This investment should address that shortfall.
The mid-size segment has seen a re-birth in the past year with sales up 21 percent versus last year and lots of new players in the segment. The Tacoma has held strong against the competition with market share dropping moderately from 51 to 43 percent. Considering the segment not too long ago was just the Tacoma, Nissan Frontier and the outdated GM twins, it wasn’t hard for Toyota to grow its share.
While the change will take a year or more to fully implement it has to be welcome news for dealers and Tacoma shoppers who have faced tight inventories and lack of big deals on new and used trucks. For example, many shoppers have told me personally they have bought new since the resale value and tight used truck has pushed prices to near the same as a new truck.
Finally, while this investment is good news for Toyota truck fans, it still fall short of Toyota making the big play in the segment. Toyota continues to be first and foremost a car company and until that changes, don’t expect a heavy-duty Tundra any time soon.