Bloomberg News

Toyota Gave Old Robots New Tools to Reduce U.S. Camry Price 2%

September 15, 2011

Sept. 15 (Bloomberg) -- Toyota Motor Corp. was able to trim the U.S. price of its new Camry sedan about 2 percent from the previous version in part by re-using old assembly robots from its former joint-venture plant in California.

“A lot of the tooling is new, however the equipment isn’t,” Steve St. Angelo, executive vice president for North American manufacturing and engineering, said in an interview. “We used a lot of used equipment” from the now-closed New United Motor Manufacturing Inc. plant, or Nummi, he said.

The eight versions of the 2012 Camry that go on sale this month cost an average of $25,245.63, down $550.63 from the models they replace, based on prices released by Toyota in a statement on Aug. 23. The high-volume Camry LE’s price fell $200 and the XLE grade dropped $2,000.

Toyota, Asia’s largest carmaker, is under pressure to trim costs and boost the appeal of models such as the top-selling Camry as Hyundai Motor Co. and Ford Motor Co. expand sales of competing midsize and compact cars. While the Camry remains the best-selling car in the U.S. this year, sales are down 7 percent through August. Deliveries of Ford’s midsize Fusion sedan are up 16 percent and Hyundai’s Sonata is up 22 percent.

“They couldn’t have tolerated a price increase for Camry in this market,” said Jim Hall, who runs automotive consulting firm 2953 Analytics Inc. in Birmingham, Michigan. “We’re basically still in a recession.”

Toyota’s North American plants are finding more savings by salvaging equipment no longer needed at some factories, St. Angelo said at the company’s automotive museum this week in Torrance, California.

Nummi’s Demise

In the case of the redesigned Camry, “we bought equipment from Nummi,” he said. “We used robots from Nummi,” said St. Angelo, who didn’t elaborate on how much that move saved.

“They were lucky there happened to be a plant closing with surplus equipment available when they were developing the new model,” said Hall. “They haven’t had that before.”

Nummi was the Fremont, California, plant Toyota shared with the former General Motors Corp., which abandoned the factory when it entered a U.S.-backed bankruptcy in 2009. That company emerged as General Motors Co. Toyota opted not to operate the factory alone and closed it last year.

Along with the production robots transferred to Toyota’s Georgetown, Kentucky, plant that makes most of the Camrys sold in North America, Nummi equipment was also acquired by Toyota’s San Antonio plant and by electric-car maker Tesla Motors Inc.

Tesla, which bought most of the former Nummi site, will begin building its battery-powered Model S sedan there next year. Toyota is also a shareholder of Tesla.

Toyota’s U.S. sales unit is also based in Torrance. The company’s American depositary receipts, representing two ordinary shares, rose $1.64, or 2.4 percent, to $71.21 at the 4:03 p.m. in New York Stock Exchange composite trading.

--Editors: Jamie Butters, Bill Koenig

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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