Line workers at Toyota’s plant in Cambridge, Ont., are seen in this file photo.Aaron Lynett/The Canadian Press
Toyota Motor Corp. will invest more than $500-million in its Cambridge, Ont., plant to boost production of the RAV4 crossover, confirming that the plant has a bright future well into the 2020s.
The announcement answers the question of what vehicle the auto maker was planning to build in Cambidge after it announced earlier this year that production of the compact Corolla would be shifted to Mexico near the end of the decade.
The substitution of the RAV4 – one of the hottest-selling vehicles in the Toyota lineup – for the Corolla underlines how the nature of vehicle assembly is changing in North America. Low-cost Mexican plants will focus on the output of small vehicles and many passenger cars, while U.S. plants will turn out full-sized pickup trucks and crossovers.
Canadian production will increasingly be dominated by crossovers, which have the space of a sport utility vehicle, but ride more like a car and get better fuel economy than heavier, frame-based SUVs.
In the case of Toyota, the RAV4 is already built in Woodstock, Ont., so adding production at Cambridge allows the auto maker to supply all of North America from plants on this continent instead of importing some of these vehicles from Japan.
"We're investing for the long term," Toyota Motor Manufacturing Canada president Brian Krinock said in an interview Tuesday. "We want to stay."
The company is still assessing how many employees it will need, but assembling the RAV4 is a more complicated process than the Corolla so it lends itself to the skilled work force at the Cambridge plant, Mr. Krinock noted. The auto maker currently employs about 8,000 people in Woodstock and Cambridge, which is also the home of the RX350 sold by Toyota's luxury Lexus division.
Sales of compact crossovers such as the RAV4 are expected to surpass those of mid-size cars in North America over all, and the RAV4 is likely to surpass the mid-size Camry in Toyota's U.S. sales, Mr. Krinock said.
The RAV4 is now the second bestselling vehicle in Toyota's lineup in both the Canadian and U.S. markets. Sales in the first 10 months of the year grew 15 per cent in both countries.
The investment will secure the future of the Cambridge plant for almost a decade – based on the traditional pattern in which auto makers invest in new tooling and equipment in a plant for two product cycles, or eight to 10 years.
Toyota will introduce its new global architecture system to the Cambridge plant. The system includes new production equipment and new processes.
The new technology means the Cambridge plant will have increased flexibility to respond to changes in consumer demand.
"This investment will revitalize our plant and create the foundation for our future success," Mr. Krinock said in a statement.
Some of the busiest assembly plants in Canada are those that are producing crossovers, including the Cami Automotive plant operated by General Motors Co. in Ingersoll, Ont., Honda of Canada Mfg. in Alliston, Ont., and the Ford Motor Co. of Canada Ltd. assembly complex in Oakville, Ont.
The Ontario government applauded the move as did Ray Tanguay, former chairman of Toyota Motor Canada, who is now a special adviser on the auto sector to the Ontario and federal governments.
"The biggest job we have is to change the perception that everything is doomed here in the north," Mr. Tanguay said.
He noted that Ontario and the Great Lakes states combined still assemble a higher number of vehicles than Mexico or the U.S. South despite the billions of dollars in new investments that have flowed into Mexico and such states as Alabama, Tennessee and Mississippi in recent years.