Section 3. Rapid Growth of the Japanese Market and Development of the Lexus

Item 3. Building Plants in Kyushu, Hokkaido, and Tohoku

Building plants outside Aichi Prefecture

In 1990 when the Japanese new-car market (including minivehicles) reached its historical high of 7.77 million vehicles, TMC's production volume in Japan reached 4.21 million vehicles, increasing by approximately 500,000 from 1987. All plants had reached their production capacity limits1 and the building of additional plants became an urgent issue.

However, one of the factors that made building additional plants difficult was the labor issue. During the bubble economy, the labor shortage became acute and, in the case of Aichi Prefecture, the average job opening-to-application ratio in 1990 had reached 2.47, the third highest in the country. Furthermore, there was also a societal demand at the time for reducing the total number of hours worked annually to 2,000 hours.

Up to that time, TMC's plants had been concentrated in Aichi Prefecture. However, due to the labor shortage, the trend toward reducing the number of hours worked, and a desire to contribute to regional revitalization, TMC announced plans to build component plants in Hokkaido and Miyagi prefectures in May 1990, and a vehicle assembly plant in Fukuoka Prefecture in July of the same year. Due to subsequent changes in the economic situation, the plan for Miyagi Prefecture was postponed, but Toyota Motor Kyushu, Inc. (in Miyata-machi, Kurate-gun (now Miyawaka City), Fukuoka Prefecture) and Toyota Motor Hokkaido, Inc. (in Tomakomai City) were established in February 1991, entirely financed by TMC. These two new companies began constructing plants in the spring of that year.

TMC made these companies separate corporate entities because of the great importance it attached to dynamic decision making conforming to the local situation and to nurturing a sense of integration with the local area. Construction completion ceremonies were held for Toyota Motor Kyushu and Toyota Motor Hokkaido in April and September 1993, respectively. Toyota Motor Kyushu's Miyata Plant, which had an annual production capacity of 200,000 vehicles, succeeded in rolling the first new Mark II off the line in December 1992. Meanwhile, Toyota Hokkaido commenced production of aluminum wheels in October 1992 and automatic transmissions in June 1993.

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