Toyota Comes to San Antonio
Published Apr 10, 2008
Toyota’s move to San Antonio with a new, $1.28 billion plant building Tundra pickup trucks has been a boon to the regional economy, directly providing more than 2,000 jobs and attracting new auto supplier companies.
Texans love pickup trucks, and Toyota hopes more Texans will be thinking “Tundra” when they choose a new pickup truck.
Texas itself is a big reason why Toyota Motor Corp. decided in 2003 to construct a new $1.28 billion vehicle assembly plant in San Antonio. The plant began manufacturing Tundra full-size pickups in November 2006 and can produce 200,000 trucks a year if desired.
“Five years ago when Toyota was starting to look at possible sites for its Tundra plant, San Antonio was nowhere on their radar,” says Mario Hernandez, president of the San Antonio Economic Development Foundation. “We went from being a complete unknown to ultimately winning out on the project.”
So what happened?
Back in 2003, Toyota had a 12 percent share of overall automotive sales in the U.S. market, but only a 4 percent sales share in Texas. So in order to build up their market numbers in the important Lone Star State, the Japanese-based company realized it needed to target the pickup truck audience.
“Texans drive more pickups and SUVs than regular automobiles – it’s just our preference for basic transportation,” Hernandez says. “Knowing that, the Toyota sales group based in California wanted to settle in Texas, but the company’s logistics and operations people were totally against it. For one reason, they pointed out that there were no automotive suppliers here because Toyota’s other U.S. plants are in the Southeast, Michigan and Indiana. Then there was one other key issue working against us as well.”
That issue was the fact that all of Toyota’s other U.S. assembly plants are located in smaller communities.
“Toyota likes to be in more isolated areas, so getting them to settle in the seventh-largest city in the country was no small task,” Hernandez says. “It took a real sales job to get them here, but we finally won out.”
Hernandez says a team effort between San Antonio, Bexar County and the state of Texas resulted in a $130 million incentive package to lure the automaker. That dollar amount is now dwarfed by Toyota’s economic significance in the local economy.
“We initially estimated that Toyota would have an annual $1.2 billion economic impact in San Antonio, but 37 supplier companies to Toyota have also located here – way more than we thought there would be,” Hernandez says. “So instead of $1.2 billion, Toyota’s economic impact figure is actually more like $1.7 billion to our community each year.”
Don Jackson, senior vice president for quality and production at Toyota Motor Manufacturing Texas, says the availability of a 2,000-acre piece of flat land just south of downtown San Antonio – coupled with easy access to rail, highways and utilities – essentially clinched the company’s decision to build and locate in San Antonio.
“Everything is going well,” Jackson says. “The 2,000-member workforce is proving to be excellent problem solvers, which is critical to Toyota. They also pay close attention to the quality of work, and our productivity is excellent. We are highly encouraged with our San Antonio venture.”
Story by Kevin Litwin
Photo by Toyota Motor North America
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