Toyota to boost Indiana output by 100,000

TOKYO -- Toyota Motor Corp. is quickening its quest to unseat ailing rival General Motors Corp. as the world's biggest automaker with reported plans to start manufacturing up to 100,000 Toyota vehicles at a Subaru factory in Indiana.\nWord of Toyota's ramped-up production schedule comes just days after money-losing GM said it will close 12 facilities by 2008 in a move that will slash the number of vehicles it is able to build in North America by about 1 million a year.\nThe combined developments could help Toyota surpass GM in worldwide production, although it's unclear if that would happen because Detroit-based GM is growing rapidly in Asia.\nToyota expects to produce 8.1 million vehicles this year, while GM expects 9 million, according to Greg Gardner of Harbour Consulting, a manufacturing consulting firm.\nToyota will also chip away at GM's lead with a new pickup truck plant scheduled to open next year in San Antonio that will add an additional 200,000 vehicles to Toyota's annual capacity. The Japanese company's output will be boosted by another 100,000 vehicles in 2008, when Toyota's new RAV 4 plant comes online in Canada.\nUnder the latest expansion plans, the world's No. 2 automaker has asked Fuji Heavy Industries, maker of Subaru autos, to start building Toyotas in 2007 at a Lafayette factory operated by Fuji's wholly owned subsidiary, Subaru of Indiana Automotive, the Asahi newspaper reported Wednesday, without citing sources.\nCompany representatives were not available for comment Wednesday, a national holiday in Japan.\nAnn McConnell, a spokeswoman for Subaru of Indiana, said Fuji Heavy Industries and Toyota Motor Corp. have been in discussions, but that there has been no word of a decision yet.\nThere are five to six candidate models for production, the newspaper said, with the number manufactured annually to gradually increase to 100,000 vehicles. Earlier reports have suggested that Toyota might produce hybrid vehicles at the Fuji plant.\nThe Indiana plant produced nearly 120,000 Subaru models last year.\nIt wasn't immediately clear if Subaru production would be reduced or what the factory's total vehicle output would be.\nFuji teamed up with Toyota in October after ending a five-year tie-up with GM, which sold its 20 percent in the Japanese company. Toyota, based in Toyota City in central Japan, bought a 8.7 percent stake from GM for about $315 million to become Fuji's top shareholder.\nOverall, GM lost almost $4 billion in the first nine months of this year, hit by falling sales and rising health care costs. Its share of the U.S. market has shrunk to 26.2 percent from 33 percent a decade ago.\nThe plant closings, which will entail 30,000 job cuts, are meant to chop $7 billion off its $42 billion annual bill for operations by the end of next year, including a $3 billion cut in health care costs.\nToyota, by contrast, is on pace to set a fourth straight year of record profits.\nBoth GM and Ford Motor Co., the world's third-biggest automaker, are seeing their U.S. market share because of Toyota and other Asian competitors. Toyota, Nissan Motor Co. and Honda Motor Co. are all reporting healthy earnings bolstered by their reputation for well-built, fuel-efficient cars at a time of surging gas prices.\nGM's tie-up with Fuji was largely deemed a flop. But access to Fuji's plants could help Toyota boost production at a time of soaring sales, analysts say, although Fuji has only the one plant in North America, so additional capacity will be limited.\nCompleted in 1988, the Indiana factory was built under a joint-venture agreement between Fuji and Isuzu Motors Ltd. Fuji bought out Isuzu's share in the venture and became sole operator of the plant in 2003.\nAfter GM's latest cost cuts, the company will be able to build about 4.2 million vehicles a year in North America, down 30 percent from 2002. Toyota is expected to have North American capacity of about 1.81 million cars by then, up from 1.44 million vehicles last year, Toyota spokesman Dan Sieger said Monday.