Recent news that Dodge would no longer support the NASCAR Craftsman Truck Series is strongly suggesting that America’s number three automaker is seriously reconsidering every single one of its marketing and publicity ventures. The NASCAR exit shouldn’t come as a surprise to anyone in light of the automakers’ big losses and huge need to raise capital.
But, Dodge’s departure from NASCAR does shine the light on what could be additional changes to the motorsports industry: cash strapped Ford and GM might also be looking at ways to trim nonessential expenses, turning the Dodge void into a gaping hole, one that could threaten NASCAR’s survival or at least its broad appeal.
Dodge’s parent, Chrysler LLC, hasn’t been a big player in the truck series of late, supporting only one team, Bobby Hamilton Racing. The automaker is well represented in both car series, winning several races this year while accumulating numerous top ten finishes. Still, even in auto racing Toyota, GM and Ford dominate, lavishing their teams and cars with cash in a bid to pull down more wins each year.
There is another matter which could create a gaping hole in the motorsports industry that no one is talking about yet. The Big 3 automakers – General Motors, Ford, and Chrysler – are pursuing what amounts to be a $50 billion low-interest loan package from the federal government to help the automakers transition their product lines from trucks and SUVs to small cars.
That plan is working its way through Congress and is expected to gain widespread partisan support and end up on the president’s desk for his signature. Though President Bush hasn’t tipped his hand yet on whether he’ll approve the legislation or not, the legislation could be delayed until the next president takes office in January 2009.
What isn’t known is what Congress will demand in return for low cost loans. Some analysts are speculating that Congress will require that the monies fund specific programs, including hybrid vehicles and alternative powered engines and related technology. A handful of people are thinking that Congress may use the loan guaranty as a way to force the automakers to divest themselves of unrelated programs which, conceivably, could include NASCAR participation.
Regardless of the strings attached, additional changes are coming which will shape the future of General Motors, Ford, and Chrysler LLC. A NASCAR truck series departure for Dodge may not sound like a big deal, but it underscores the financial difficulties found in America’s auto industry and the political help needed to see the companies through these difficult times.
By: Toyota USA Blog
The Toyota Motor Corp. said last Friday that it plans to build a new factory in Fukuoka in southwestern Japan to produce components for gas-electric hybrid vehicles. Toyota, which leads the market in hybrid sales, said it plans to acquire about 340,000 square meters of land there and put production lines for hybrid parts together from other plants.
Toyota spokeswoman Yurika Motoyoshi said details, including the size of the investment and timing, are still unknown. The Nikkei, Japanese daily, earlier reported that the automaker would likely invest tens of billions of yen.
The Japanese auto giant targets to sell 430,000 units of hybrid vehicles worldwide this year. The figure is up by 37 percent from that of last year. The automaker also has said that it aims to boost domestic production of the popular Prius hybrid cars by 40 percent to 280,000 units this year.
The Toyota Prius, the first mass-produced and marketed hybrid car, went on sale in 1997 in Japan and in 2001 worldwide. In the United States, the Prius initially attracted purchasers interested in the vehicle’s low particulate emissions, advanced technology, and high fuel economy. The benefits are boosted by Toyota cold air intake, engines and other auto accessories.
Last year, the demand for the Prius increased because of various reasons that include the rising price of gas, tax credits provided by the federal government lowered the end-price to consumers, and some states introduced privileges for hybrid vehicle drivers.
Separately, the automaker also plans to invest $413M in its Kentucky plant in Georgetown to manufacture new vehicle. The board of directors of the company will make a decision soon about where it will make the new model, which has not yet been announced, according to Jim Kersteiner, the assistant general manager in the accounting and finance group for Toyota Motor Engineering and Manufacturing North America Inc. Kersteiner added that the project would begin by late 2008.
Rick Hesterberg, the assistant manager of corporate communications for Toyota Motor Manufacturing Kentucky, said the company is not looking to expand the plant. The new investment would be used for the acquisition of new production equipment and for repairs of assembly and engine production areas in connection to the new model.
To encourage the Japanese automaker to make its investment at the Georgetown facility, the Kentucky Economic Development Finance Authority gave preliminary approval for Toyota to receive $25 million in tax incentives. The incentives were offered under the Kentucky Reinvestment Act, which offers tax breaks to companies with more than 1,000 employees that plan to invest $100 million or more in an existing facility. In 2006, the automaker also was granted $18 million in state tax incentives under the reinvestment act for investing $248 million at the Georgetown facility.
By: Lauren Woods
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Earlier, Toyota Motor Corp.(TMC) celebrated the opening of Toyota Motor Manufacturing, Texas (TMMTX) valued at $1.28 billion. It is the newest plant of the automaker situated in San Antonio. During the opening of the new plant, two Tundras were manufactured. The production of the pickup truck was witnessed by Dr. Shoichiro Toyoda TMC’s honorary chairman, and Katsuaki Watanabe, TMC president. They are joined by Rick Perry, Texas governor, and other local officials. According to the automaker, the new Tundra plant has 21 on-site suppliers that invest nearly $1.6 billion. Toyota also announced that it will employ over 4,000 workers for said plant.
“As Toyota moves forward into a new era, this new plant is a dynamic symbol of our bright future,” said Watanabe. “Here in Texas, we have assembled a great team of people, a great plant, and a great truck. Along with great people, this is one of the most advanced automotive plants on the earth. It has the latest in technology and is using the best production and environmental techniques learned from 60 plants we operate around the world.”
Toyota’s San Antonio plant was announced in 2003 and its construction started later that year. Said Tundra plant will start full operations next spring and it will employ 2,000 team members to work on accessories Toyota Tundra truck parts.
“When Toyota announced it would build a plant in Texas, it was the shot in the arm we needed to transform our economy and begin creating jobs in Texas again,” said Texas Governor Rick Perry. “Today employment is at an all-time high, we have a record state surplus and the Texas economy is leading the nation. Toyota is an important part of the Texas economic revival because their investment means thousands of jobs and millions of dollars in wages for Texas families.”
The automaker’s investment in said plant was initially estimated at $800 million. In time the estimate grew to about $1.28 billion due to the expansion in capacity for 50,000 more trucks. The change greatly affected the cost of materials for Toyota truck parts. The steel and the additional infrastructure needed are the significant factors that increased the estimate.
“The full-size pickup truck market is, by far, the single-largest opportunity for Toyota’s future growth plans in the U.S.,” said Don Esmond, senior vice president of automotive operations, Toyota Motor Sales, U.S.A., Inc. “Thanks to this highly-efficient plant, the in-house suppliers and all the team members, we plan to take full advantage of that opportunity. The new Tundra will arrive in showrooms in February. Our production and sales goals are ambitious, yet realistic, and reflect our confidence in the product.”