NEW YORK -- Toyota Motor will make a sport utility vehicle instead of the Corolla sedan at a planned Alabama assembly plant due to the surging U.S. demand for SUVs, the Japanese automaker said Wednesday.
The $1.6 billion U.S. plant under construction, half-owned by compatriot Mazda Motor, originally was to produce up to 150,000 Corollas a year after it begins operation in 2021. Mazda also intends to assemble 150,000 units of a new crossover model at the Huntsville facility.
But Americans are shifting from sedans to SUVs and other large vehicles. Light trucks, which include SUVs and pickup trucks, account for roughly 70% of new-car sales in that market. Corolla purchases during the first half dipped 5% from the year-ago period, yet unit sales of Toyota's RAV4 crossover grew 2% to an all-time high.
Against this backdrop, Toyota decided to refocus the Huntsville facility on an SUV, whose details will be disclosed at a future date. Corollas will continue to be produced at a plant in the neighboring state of Mississippi.
Light trucks top 60% of sales for Toyota, a company whose strength has been in sedans. Jack Hollis, group vice president at Toyota Motor North America, has said he expects the figure to approach 70% in the long term.
First-half sales of vehicles in the U.S. fell short of the year-earlier figure. But light trucks cost about $10,000 more than passenger cars. The promising margins, combined with the demand for large vehicles, are expected to shore up earnings of automakers in the U.S.