Toyota Motor Corp. (TM) announced that it will boost annual engine assembly capacity of 4-cylinder engines at its Georgetown, Kentucky plant by investing $30 million. The company will increase engine production to more than 500,000 annually from 400,000 at the plant, starting from August next year.
Currently, the Kentucky plant assembles engines for Toyota’s Avalon, Camry and Venza models. The enhanced capacity will help the company supply engines for Camry and Camry Hybrid, manufactured in Georgetown, and RAV4, assembled in Woodstock, Ontario.
The expansion project is anticipated to create 80 jobs at the plant. It will raise the total workforce at the plant to 6,700 workers and total investment to more than $5.96 billion.
Kentucky is the fourth plant chosen by Toyota for capacity expansion in recent times. Previously, the company has raised production in Indiana, West Virginia and Canada plants. So far, the total investment made by the company for expansionary purposes amounted to $565 million, adding nearly 1,000 jobs.
Toyota, a Zacks #2 Rank (Buy) stock, posted a 30.5% decline in profits to ¥283.56 billion ($3.7 billion) or ¥90.20 ($1.17) per share in its fiscal year ended March 31, 2012 compared with ¥408.18 billion or ¥130.16 in the prior fiscal year. With this, the company has missed the Zacks Consensus Estimate of $2.52 per share for the year.
Consolidated revenues in the year dipped marginally by 2% to ¥18.58 trillion ($241.59 billion). Total unit sales increased 0.6% to 7.35 million units during the fiscal year. Higher unit sales in Japan (8%), Europe (0.3%) and Asia (6%) were significantly offset by lower sales in North America (8%) and Other reporting regions (2%).
The decrease in revenues and profits was attributable to challenges faced by the company owing to the earthquake in Japan and severe flooding in Thailand in 2011 as well as unprecedented strength of the yen.
For fiscal 2013 ending March 31, 2013, Toyota projected consolidated vehicles sales to increase 1.35 million units to 8.70 million units. Consequently, the company expects higher consolidated revenues of ¥22.00 trillion, operating income of ¥1.00 trillion and net income of ¥760.0 billion for the fiscal year compared with fiscal 2012.
Toyota is the leading automaker in the world. Its product portfolio consists of a full range of models from passenger cars, minivans and trucks as well as related parts and accessories. Its domestic competitor includes Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY).
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