Americans’ love of pickups is the only saving grace of the U.S. auto industry at the moment — a point highlighted Tuesday when Toyota Motor Corp. announced its San Antonio-made Tacoma scored its strongest-ever May sales, despite the economic catastrophe brought on by the novel coronavirus.
Another sign the truck market is reviving: the Japanese automaker said it will bring 392 contract workers, who were laid off in April, back to work at its South Side plant. They’ll return to their jobs over the next two weeks.
“Demand is picking up faster than we originally expected, which means more truck production,” said Kevin Voelkel, president of Toyota Motor Manufacturing Texas. “As we continue to ramp up production, our focus will remain on the health and safety of our team members.”
Overall, Toyota laid off 5,000 contract workers at its 14 North American plants after the pandemic struck. Company officials declined to say whether contract employees would return to work at the other facilities.
Toyota sold 24,853 midsize Tacomas last month, up 8.9 percent from May 2019. Sales of the full-size Tundra, also made in San Antonio, climbed 8.2 percent from the previous May, to 11,529.
Industry analysts were taken aback.
“You don’t expect the best May sales numbers in history in the middle of a pandemic,” said Jessica Caldwell, executive director of insights at the automotive website Edmunds.com.
Toyota spokesman Victor Vanov attributed the jump to improving customer confidence, pent-up demand and competitive incentive programs.
Toyota offered zero-percent financing in May for five years on Tacomas — a rare incentive for the most popular midsize pickup in the U.S., said Tyson Jominy, vice president, automotive data and analytics for market data research firm J.D. Power.
“It was a very attractive offer,” he said.
The trucks’ May numbers mark a major rebound from April, when Tundra sales dropped 19.4 percent and Tacoma sales plunged 30.4 percent from April 2019.
Toyota isn’t alone. The pickup has become the king of vehicle sales among most major auto manufacturers.
General Motors has said it’s boosting production at its three pickup plants to three shifts a day, keeping them in operation around the clock, to meet consumer demand for its truck lineup.
For nearly every other kind of vehicle, the market remained grim in May.
Toyota’s overall sales were down 26.6 percent from the same month a year earlier. Still, the slump was worse in April, when the automaker saw a drop-off of more than 50 percent.
“A lot of automakers are still struggling,” Caldwell said. “Clearly, this country is not completely functional yet. And there is so much financial concern among consumers that, for most people, an immediate vehicle purchase is out of the picture.
“So, I think automakers will be struggling for quite some time to return back to normal,” she said.
Auto analysts said the resurgence in sales is coming faster for pickups than for other vehicles because they’re needed for work, including construction and ranching. Also, trucks are especially popular in rural communities that have been less affected by stay-at-home orders than major metro areas such as San Antonio.
“We believe that as long as inventory holds up, pickups will continue to lead this sales recovery,” said Michelle Krebs, executive analyst at Cox Automotive.
The shutdown of plants by Toyota, General Motors, Ford Motor Co. and Fiat Chrysler Automobiles from late March through early May has cut into dealers’ inventories of pickups. Toyota’s San Antonio plant, which re-opened May 11 and employs 3,000 workers, has not yet hit full production.
Toyota suppliers account for another 4,000 workers in San Antonio.
“We have focused on ensuring the health and safety of all our employees, and have had a balanced approach to restarting the production line, with a focus on training and recertification activities,” Toyota Texas spokeswoman Melissa Sparks said.
With rebounding consumer demand, she said, Toyota will reinstitute its second-shift production June 15.
The automaker is expected to shift Tacoma production from the San Antonio factory to its two plants in Mexico in late 2021.
After that, the plant here will start manufacturing the Sequoia, a large SUV that’s one of the least popular Toyota models. Toyota sold 394 Sequoias in the U.S. in May, down more than 50 percent from the same month a year earlier.
Randy Diamond covers aviation, energy and manufacturing in the San Antonio and Bexar County area. To read more from Randy, become a subscriber. email@example.com
Credit: Source link