Wall Street Journal Says Toyota Considering Slowing Its Plan For U.S. Factory Building

Wednesday, June 20th 2007, 8:36 am

By: News On 6

DETROIT (AP) _ Toyota Motor Corp. is concerned that it has built too many factories in the United States and is considering a slowdown in its plans for further plant building here, according to a newspaper report Wednesday.

Although Toyota's U.S. sales continue to grow, executives worry about an uncertain outlook, The Wall Street Journal reported.

In addition, a cheap yen has made it more profitable for the company to produce cars in Japan and ship them to the U.S., according to a senior executive and management-board member the Journal didn't identify by name.

Tomomi Imai, a spokesman for Toyota in Tokyo, declined to comment on the report.

In Japan, most of Toyota's factories are clustered in a single place, Toyota City. In the U.S., over the past decade, Toyota has spread factories from Fremont, Calif., to Georgetown, Ky.

``Toyota has just announced the new Mississippi plant, where production is set to start in 2010,'' Imai told The Associated Press. ``As for North American plants after that, nothing has been decided.''

The assembly plant on the outskirts of Tupelo, Miss., will be Toyota's eighth North American vehicle-assembly plant and the fourth new one in the past five years.

Despite the reported concerns about U.S. production expansion, the U.S. likely is to remain one of Toyota's most profitable markets. A recent shift to more fuel-efficient cars has helped increase Toyota's U.S. sales even as Detroit's automakers struggle.

Toyota's decisions to add plants in the U.S. always have involved more than maximizing manufacturing efficiency. The automaker regards building more vehicles in the U.S. as a form of political insurance. The company long has been concerned about a resurgence of trade tensions.

In Japan, some of Toyota's plants are capable of building more than a half-dozen different vehicles. In North America, several of them build just one or two models, making them somewhat inflexible to adjust to sudden swings in demand.