Toyota cutback shouldn’t be a concern


There was some alarm a couple of weeks ago when Toyota Motor Co. announced that it was cutting back on production of its Tundra truck and Sequoia sport utility vehicle.

If the Japanese automaker is cutting production, does that mean that the $1.3 billion plant it’s building in Northeast Mississippi is in danger of being scuttled, some wondered? The mid-sized Highlander SUV will be built at the Blue Springs plant, so some of the worried thinking was that a ripple effect could mean potential problems with building the plant.

Rest your fears - that isn’t happening, barring a complete collapse of the auto industry and an implosion of the world’s second-largest automaker.

So why cut production of the Tundra and Sequoia? While sales of the hulking vehicles are higher than a year ago, Toyota expects demand to slow. Given the higher gas prices and other economic worries the move is in anticipation that consumer spending will pull back on big-ticket items.

Tundra sales were, in fact, nearly 17 percent higher in March than a year earlier. Sequoia sales were up nearly 20 percent. So it’s not like the bottom was falling out. However, total Toyota SUV sales - which include the FJ Cruiser, 4Runner, Highlander, Land Cruiser and Sequoia - were down nearly 20 percent in March and 15 percent for the year.

Highlander sales, by the way, were down 0.2 percent in March but were up more than 7 percent for the year.

And while Toyota will be trimming production, it’s not laying anybody off.

Other automakers off, too

But Toyota wasn’t the only automaker to post a less-than-stellar truck and SUV sales in March.

GM’s truck and SUV sales dropped 22 percent in March; its Hummer brand sales were down 29 percent.

At Ford, sales for trucks and large SUVs fell 17 percent. Even its popular F-Series pickup, the best-selling truck for 31 years, were down 24 percent.

Chrysler’s light truck sales fell nearly 22 percent. Its Jeep brand had sales drop 12 percent.

Honda’s truck and SUV sales declined 12 percent.

Nissan’s truck and SUV sales dropped 20 percent. The company’s Titan pickup plummeted 45 percent while its Armada SUV plunged 43 percent

Auto analysts say - no surprise - that small car sales are faring much better, with four-cylinder vehicles gaining in popularity.

Will auto sales improve? Some automakers are hopeful that the economic stimulus package that consumers will be getting in the next few months will spur buying.

Some rough months likely are still ahead for the industry before it gets better.

But thankfully, the building continues in Blue Springs. And in Dorsey and Baldwyn.

Posted By Mehul Brahmbhatt
Apr 10, 2008

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