NAGOYA -- Toyota Motor will consolidate compact car production at a northeastern plant while rearranging assembly at other domestic sites to achieve greater efficiency.
Toyota churned out 3.26 million autos in Japan in 2014, but vehicles of similar sizes and types were not necessarily made in close proximity. The automaker will rework domestic production to achieve a medium-term target of maintaining production of 3 million units a year in Japan.
Manufacturing of the mainstay Vitz compact, currently made at unit Toyota Industries in Aichi Prefecture, will be taken over by Toyota Motor East Japan in Miyagi Prefecture, which already makes several compact models. The transfer will start as early as 2017 and be completed around 2019.
The move will trim initial costs needed for production launches as well as transportation expenses.
At the same time, Toyota Industries will use the freed-up capacity to focus on sport utility vehicles, which enjoy strong demand in the U.S and elsewhere. Production of the Corolla sedan, now made at Toyota Motor East Japan, will be moved to an Aichi Prefecture plant run by the parent. To hedge against a major fluctuation in demand for compacts, the Miyagi facility will make the new SUV C-HR as well.
As for sites in Aichi Prefecture, the automaker will end production of the Prius at Toyota Auto Body in November. The company will focus instead on SUVs and minivans. The Prius will be taken over by two parent-operated plants.
Toyota will also realign production in North America by dividing it into four geographical areas, with each responsible for large cars, small to midsize cars, SUVs and pickups. A Mexican plant slated to open in 2019 will build the Corolla while a Canadian plant making that sedan will switch to SUVs. With another plant in the U.S. state of Mississippi already making the Corolla, the production of that model will be consolidated in the southern U.S. and Mexico.
With its global production reaching 10 million units a year, Toyota introduced a design initiative called Toyota New Global Architecture, which involves using common parts across different models, among other steps. The new Prius, debuting in December, is the first product using this format. The production revamp is deemed crucial to a smooth introduction of the initiative.