Toyota Fears U.S. Backlash, Denies Plans For India

Report in the Detroit Free Press says Toyota fears a political and consumer backlash; company spokesman denies reports of India plant.

(AP) –Toyota Motor Corp. has concerns that its U.S. growth could cause political and consumer backlash, according to a confidential company report obtained by the Detroit Free Press.

The newspaper published details Monday night on its website from a copy of the report, which was left unsecured on computers at the Japanese automaker’s Georgetown, Ky., plant and passed around by hourly employees.

“A Democratic Congress, particularly those members with districts hit by Big 3 and supplier plant closings, may call for further oversight of the industry and Japanese companies in particular,” the presentation said.

The report from Seiichi Sudo, president of Toyota Engineering & Manufacturing in North America, says the company could face criticism because its U.S. sales are increasing while U.S. competitors face difficulties.

“Toyota will be a ‘scapegoat,’” one slide says.

“Society expects that we will make the same economic and social contribution as the companies we replace,” the accompanying text says. “And we need to position ourselves to respond to corporate image attacks.”

The company has declined to release a copy of the report to The Associated Press, but said the essence of the five-year planning document was that Toyota will continue to focus on enhancing productivity, quality and safety.

The report also said Toyota could come under fire for selling vehicles to U.S. customers with high proportions of foreign-made parts and not including enough minority-owned businesses in its parts supplier base.

Last week, the Free Press published details from the report about Toyota’s efforts to restrain labor costs in North America.

Toyota in 2006 reported its U.S. sales rose 12.9 percent to about 2.5 million vehicles. Worldwide, Toyota is threatening to unseat General Motors Corp. this year as the largest automaker.

Globally, a spokesman for Toyota denies reports of a proposed plant for India, but says it is looking to develop a new small car for emerging markets.

The remarks came after the respected Nihon Keizai business newspaper reported Japan’s biggest automaker plans to spend up to $413 million on a new Indian factory, to be built near the company’s first assembly plant in Bangalore.

The second plant would initially produce 100,000 entry-level, family style vehicles priced at around $6,610, making them the lowest-priced vehicles in Toyota’s lineup, the paper reported Monday without saying how it got its information.

Toyota spokesman Paul Nolasco said Toyota is always evaluating overseas expansion plans but that no decisions have been made regarding India, where its Bangalore plant produces about 44,500 vehicles a year.

“We don’t have any concrete plans for a new plant in India,” Nolasco said.

With auto sales slowing in developed markets like the United States and Japan, automakers are increasingly turning to developing areas like Brazil, China, Russia and India to ramp up production closer to growth markets.

To better penetrate those developing markets, Toyota is also considering a smaller, entry-level model, but details have also not yet been set, Nolasco said.

More in Operations