Toyota Starts Production of Tacoma in Texas

SAN ANTONIO, Texas - Toyota Motor Corp. managers are renowned for collecting reams of data to predict market trends, but the Japanese automaker's truck plant stands here as a symbol of one time when Toyota got it wrong, The Detroit News reported.

Its full-size Tundra pickup never sold as well as Toyota expected four years ago, when it opened the assembly plant dedicated solely to Tundra production.

But after the devastating industry downturn of 2008 and 2009, Toyota decided to build a smaller truck here as well, its Tacoma, and the company marked the start of its production here Friday.

Proclaiming "It's Tacoma Day in Texas," Gov. Rick Perry joined local officials, senior Toyota executives and plant workers at the factory for a brief but lively midmorning celebration.

Toyota has hired 1,000 new workers and invested $100 million to produce Tacomas on the same line as Tundras, bringing the total investment in the plant to $1.4 billion.

The factory now employs 2,800 "team members," as the workers are called, including the original hires who were retained even when Toyota halted production in San Antonio for three months in late 2008.

Toyota stopped making the Tacoma and other vehicles in Fremont, Calif., after General Motors, its partner in New United Motor Manufacturing Inc., quit the venture as part of its bankruptcy in 2009.

Toyota said last August that it would transfer Tacoma production to the Texas plant, which was running well below its production capacity. Output of Tacomas in Texas began a month ago.

By making the Tundra and Tacoma on the same line, Toyota will be able to respond better and faster to the market's demands, said Jim Lentz, president of Toyota Motor Sales, the U.S. sales subsidiary based in Torrance, Calif.

When gas prices spiked in 2008, demand for thirsty full-size trucks plunged, while demand for midsize, more affordable trucks held up better, he said.

Toyota's Tacoma starts at just over $16,000; the Tundra starts above $23,000 and the largest, most powerful versions cost more than $40,000.

But demand for full-size pickups is starting to rebound. GM and Ford Motor Co., the dominant players in this segment, are reporting strengthening demand for their big pickups.

"We're seeing a slight increase in construction and in demand from municipalities and small businesses, and that's helping to rebuild this segment," said Rebecca Lindland, an analyst at IHS Automotive in Lexington, Mass.

Sales of Toyota's Tundra are up 20 percent this year, while Tacoma sales are flat, Lentz said.

Referring to industrywide sales of full-size pickups, he said, "I don't think they'll be back to the 2 million mark, but maybe to 1.6 million, 1.8 million."

For the year, Lentz predicted Toyota will sell about 205,000 pickups in the United States: 100,000 Tundras and 105,000 Tacomas.

Toyota also produces 50,000 Tacomas in a plant on the outskirts of Tijuana, Mexico.