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Parts crunch threatens Toyota's efforts to boost pickup output

Discussion in 'Toyota Truck, Van and SUV' started by OishiiJPN, Nov 8, 2015.

  1. OishiiJPN

    OishiiJPN Administrator

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    As Toyota Motor Corp. tries to squeeze more production out of its San Antonio pickup plant, the automaker has encountered a chronic production bottleneck: its own suppliers.

    Fifteen key suppliers are running flat-out but are unable to support a planned production increase of 10,000 vehicles next year, said Bob Young, Toyota's North American purchasing chief.

    "Our suppliers have been stretched," Young said in an interview last month. "We've hit the tipping point with certain commodities."

    The parts crunch comes as Toyota's two truck plants -- in San Antonio and Tijuana, Mexico -- are running at full speed to keep up with demand.

    This year through October, U.S. deliveries of Toyota's midsize Tacoma pickup rose 17 percent to 148,905, as Toyota maintained a sales lead over the General Motors duo of the Chevrolet Colorado and GMC Can-yon, whose combined sales totaled 95,132.

    In September, Toyota unveiled an updated Tacoma with a new engine, transmission and a crawl-control feature for off-roading. The company expects to sell 165,000 Tacomas annually.

    To handle increased demand, the Tijuana plant has added a third shift, boosting annual straight-time Tacoma output to 85,000. And now Toyota's San Antonio plant -- which produces Tacomas and full-size Tundras -- is revising its shift schedule to add Saturday production.

    The plant is maxed out at 230,000 vehicles a year. Toyota will hire 200 workers and spend $26 million to add production of 10,000 units, to be phased in from January through next summer.

    But there's a catch: 15 Toyota suppliers can't keep up. Young did not identify the suppliers or the components, but he noted that Toyota is working with each vendor to eliminate bottlenecks.

    That could require tooling, additional workers and capital investments. But it won't include around-the-clock operations -- even temporarily. "Our desire is not to have suppliers running seven days a week," Young said. "It's too risky and not sustainable. They can't survive with that."

    Maybe not, but the pressure is on the San Antonio plant to boost production.

    The redesigned Tacoma has received good reviews, and Toyota executives said last month that the Tacoma is getting its biggest ad budget in 10 years.

    The campaign positions Tacoma as the off-road truck of choice for dirt-bike racers, snowboarders and other fun seekers.

    Dan Edmunds, director of vehicle testing for Edmunds.com, says Toyota marketers made a canny decision.

    "I was pretty impressed with the changes they made, but they kept the Tacoma's personality intact," Edmunds said. "They managed to increase fuel economy without harming the truck's off-road performance, where it always defined itself."

    Dealers are begging for more product. During an Oct. 27 earnings teleconference, Group 1 Automotive Inc. CEO Earl Hesterberg said truck sales were surging, thanks to low gasoline prices. But supply hasn't kept up with demand.

    "We are very short of trucks," Hesterberg said. After noting Group 1's strong sales of Ford and GM pickups, he added: "We have absolutely no Toyota trucks."
     

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