Flashspoter - Toyota is increasing its manufacturing presence in the U.S. a bit further by revealing a new $912 million investment to raise the production capacity of hybrid vehicles in five states: West Virginia, Kentucky, Mississippi, Tennessee, and Missouri. The spending is only a portion of Toyota's overall plan to pump as much as $10 billion into the U.S. over the next five years and is a clear indication of the company's strategy to keep its lead in the hybrid segment.
The company decision is a reaction to the increased market demand for hybrid vehicles, in particular, U.S. consumers who still view the technology as the most viable way to transition to electric vehicles. According to Motor Intelligence data, Toyota currently leads more than 51% of the hybrid market share in the US through the third quarter of this year, making it the manufacturer that benefits the most from the trend.
West Virginia Gets The Largest Share Of Investment
Toyota's plant in Buffalo, West Virginia, received the largest portion of the investment with a value of $453 million. The funds are directed to increasing the production of hybrid-compatible four-cylinder engines, the sixth generation hybrid transaxle, to motor stator components. The growth plan is likely to generate 80 additional positions and the complete system will be in place at the latest in 2027.
Additionally, the Buffalo facility is a major power house of the program that is responsible for the production of over one million engines and transmissions every year. The addition of this capacity places the facility as one of the most strategic hybrid component production centers for Toyota in the North American region.
Huge investment in Toyota's giant Kentucky plant
Toyota's facility in Georgetown, Kentucky, the largest Toyota plant worldwide, received a $204.4 million investment. The funds were used to install a new machining line dedicated to hybrid four-cylinder engines. The plant is capable of assembling up to 700,000 powertrains per year and employs nearly 10,000 people. With this expansion, Toyota will add 82 new workers to support production from 2027.
Corolla Hybrid starts Assembly in the USA
The $125 million investment goes to Toyota's plant in Blue Springs, Mississippi, which will begin assembling the first Hybrid Corolla produced in the United States. Previously, this model was produced abroad. The decision to bring production to the U.S. was made in response to a surge in consumer demand for more affordable hybrid vehicles.
The Corolla Model, one of Toyota's global best-selling lines, is a key pillar of the company's strategy to expand its portfolio of competitively priced hybrids in the U.S. domestic market.
Additional Hybrid components from Tennessee and Missouri
Toyota is also strengthening the hybrid component supply chain through two additional facilities:
Tennessee - $71.4 million investment, 33 new jobs
With the addition of the three new production lines, the Jackson, Tennessee, facility will be able to expand the output of hybrid transaxle casings, housings, and engine blocks. The total annual capacity is going to be raised by close to 500,000 extra units when the new line is up and running in 2027-2028.
Missouri - $57.1 million investment, 57 new jobs
Toyota's Troy plant will add a new hybrid cylinder head production line with an increased capacity of more than 200,000 units per year. With this expansion, Toyota's total investment in the facility totaled more than $629 million.
The overall Total of the five states is 252 new jobs that will be offered gradually over the next few years.
Strategic reasons behind this major expansion
Toyota considers this growth as a method of security for its business when U.S. automotive regulations will be changing fast and again. As President Donald Trump’s administration is imposing several new tariffs on cars and parts imports, the increase of local production of vehicles has turned out to be a sensible way of maintaining the total cost at a reasonable level and keeping the company competitive in the market.
Toyota Chairman Akio Toyoda appeared at a racing event in Japan wearing “Make America Great Again”merchandise. Although not directly related to company policy, the moment sparked public discussion regarding Toyota's relationship with the U.S. trade agenda.
On the other hand, Toyota has consistently maintained its “build where we sell” philosophy, which is to produce vehicles directly in the country where the product is sold. Toyota currently assembles about 76% of all vehicles sold in the U.S. at its North American manufacturing facilities.
Investment for future HR
In addition to expanding production facilities, Toyota is also investing in workforce development through the Driving Possibilities Education Initiative, a $110 million program to support STEM education from pre-K through high school. The Program is designed to create a long-term career path for the young generation who have the potential to become a workforce at Toyota facilities in the future.
source CNBC, Pressroom Toyota
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