Toyota Motor Corp. made an announcement that starting in May it will significantly cut output at the Indiana and Texas plants that manufacture the Tundra and super sized Sequoia SUV.
The company points to the slow-down in the U.S. economy and rising gas prices as the reasons.
But aren’t we starting to blame every problem under the sun on the economy and gas prices? Oh yeah, we also can’t forget the slumping housing market! But is the housing market really slumping or are home prices merely returning to “normal” levels? We will leave that to the economists. And another blog post, of course.
But getting back to the original discussion. The Tundra could definitely be adversely affected by the bad housing market since Toyota was trying to sell its full-size Tundra to contractors and people involved in the construction industry.
Or could it be that buyers have been turned off by the myriad quality glitches, recalls, and breakdowns? Toyota has not had an easy rollout for its first truly full-size pickup truck. But, to be blunt, is it all that surprising. Not only is the Tundra built on an entirely new platform, it's also being manufactured at an entirely new factory in Texas. Just having one of those variables in the mix for a new vehicle can spell disaster for even the most “together” of manufacturers. Personally, we are sure the quality bugs will be totally ironed out during its second year. Toyota rarely makes mistakes twice.
As for the new Sequoia--aside from the fact that it now looks like a beached porpoise--it is also suffering from coming to market just as people are starting to downsize their SUVs. It is Suburban-sized in a market that is turning more to vehicles like the Honda CR-V. Toyota just needs to adjust its manufacturing output to keep from saturating the market with too much product. (Are you listening to this idea, Chrysler?)
This method has always been a cornerstone of Toyota manufacturing. Termed “just on time” manufacturing, the practice has helped keep Toyota from overproducing unwanted models. Unfortunately for Toyota, it looks like at this time full-size SUVs and Trucks are not what America really wants.
The reason this downturn in truck sales is bad for Toyota is mainly due to the fact that they invested a couple of billion dollars in the new Tundra. As a result of this, we suppose now it will take just a few more years to pay off the mortgage for the new factory.