Toyota Motor Corp. is targeting one of the fastest growing segments in the car business with plans to remodel an assembly plant in Cambridge, Ontario, to build the next generation RAV4 there, starting in 2019.
With production of the Lexus RX in Cambridge, and Toyota RAV4 in Woodstock and Cambridge, Toyota Motor Manufacturing Canada will become a North American hub for sport-utility vehicles. The company also announced that it will be adding hybrid RAV4 production to models built in Canada, said Toyota Motor North America Chief Executive Officer Jim Lentz.
“The RAV4 and the RAV4 hybrid are great products for TMMC,” said Lentz. “RAV4 is a leader in the fastest growing segment of the North American auto industry. We forecast that the segment will continue to demonstrate strong growth with the RAV4 being a major player.”
Lentz also said that “producing additional RAV4s, a more upscale, more complex, higher content vehicle, fits well with TMMC’s well-earned reputation for quality.”
To accommodate the change, the Cambridge North Plant will receive significant new investment, including the introduction of Toyota’s New Global Architecture. TNGA is an innovative, integrated approach to developing and building vehicles, involving new production equipment and new processes.
Bill Fay, Toyota Motor Sales vice president, said the current generation of the RAV4 is already a major success story. Sales have grown steadily during the past three years. Toyota sold 200,000 RAV4s in 2013 but this year expects sales to top 300,000 units.
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The maker anticipates sales could reach more than 400,000 units with the extra capacity from the Cambridge plant, Fay told reporters during a preview in Southern California of the hybrid version of the RAV4 that is being added to the Toyota line.
Toyota has been selling the RAV4 in the U.S. since 1994, but in recent years the popularity of the compact SUV has boomed, said Fay, who noted the segment is drawing buyers from among baby boomers, who are interested in downsizing their vehicles to millennials who are looking for versatility.
“The product is replacing the midsized sedan,” Fay added.
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To accommodate the utility vehicle production in Canada, Toyota plans to move production of the Corolla now built in Cambridge to a new plant in Mexico.
Brian Krinock, TMMC president, said that with a new platform and the latest technology, TMMC will have the flexibility to respond to the evolving needs of the automotive marketplace.
“Bringing TNGA to Canada will propel us to the next generation of automotive manufacturing and provide the basis for our longstanding commitment to employment stability.” Krinock said, noting that when the project is finished in 2019, Toyota will have been making vehicles in Canada for thirty years.
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“This investment will revitalize our plant and create the foundation for our future success,” he added.
