Prius Supplies at 2 Year Low

[DaveinOlyWA]

Originally Posted by drees

Please explain how they produce 1.5 million cars, 1.3 million engines and 400k transmissions in the USA and still manage to make a profit. If it would save them $5-10k on each of these vehicles produced in the USA, Toyota would bump profits up another $7-15 BILLION dollars.

Engineering and Manufacturing Plants

your logic is illogical.

added expense in one place does not equate to added profit in another... its probably under the heading of "cost control"

it could very well be that they could not sell the Prius at a marketable price if it were built here, but not because of labor costs. Japanese auto workers are paid very well. the supply lines to the US would be the prohibitively expense part of the operation.

its the old adage, "the whole is greater than the sum of its parts", except that in this case, its just the opposite. shipping a car verses shipping several components is MUCH MUCH cheaper and easier to do.

[drees]

Originally Posted by DaveinOlyWA

your logic is illogical.

That was exactly my point! There is no way that producing cars in Japan vs USA saves Toyota $5-10k on each car. There just isn't that type of profit margins on most of the vehicles they manufacture in the states.

Originally Posted by DaveinOlyWA

its the old adage, "the whole is greater than the sum of its parts", except that in this case, its just the opposite. shipping a car verses shipping several components is MUCH MUCH cheaper and easier to do.

Like you say - shipping all the parts from overseas to a plant in the US to assemble here wouldn't make much sense. At a minimum, they would also produce most of the "big parts" here, like the engine, transmission, generator, etc. The big, heavy things which are expensive to ship. Judging by the number of vehicles, engines and transmissions produced by Toyota in the US (see my earlier quoted numbers), that is what they do.

[DaveinOlyWA]

not a pissing match at all. unfortunately many of the hybrid components would have a much tougher time being made here. most of the "big" parts are manufactured here...

also, i doubt that any of us are more qualified to tell Toyota how to make money than Toyota itself. im sure they have addressed the obvious since most of the Priuses made are sold here. and who knows? they maybe just around the corner from announcing a NA plant to build the Pri...

[tripp]

It's interesting though that they make the HyCam here but not the prius. Obviously there's a lot of synergy with the standard Camry, but still, under the hood they are radically different cars. Now that high petrol prices are here to stay it will probably happen. I think Toyota was probably concerned about the risk (the price of oil), but as demand for the Prius grows and grows they will start making them locally. They do this with their other cars, why not the Prius too?

[DaveinOlyWA]

well battery supplies and NOT factory capacity is the bottleneck. as i understand it, the factories building the Pri's now could produce more but dont have the supplies.

[tripp]

Sounds like the same problem that was plagued PV production for a few years, lack of raw materials. It's a good problem to have and I expect that it'll be relieved in the short term.

[morpheusx]

Originally Posted by DaveinOlyWA

not a pissing match at all. unfortunately many of the hybrid components would have a much tougher time being made here. most of the "big" parts are manufactured here...

also, i doubt that any of us are more qualified to tell Toyota how to make money than Toyota itself. im sure they have addressed the obvious since most of the Priuses made are sold here. and who knows? they maybe just around the corner from announcing a NA plant to build the Pri...

They already build them in China for the chinese market what makes you think they wont here. By the way 90 % of the parts that they use for the North American built Lexus / Toyota vehicles are from suppliers in North America. They already build quite a few Toy Camry Hybrids in Lexington KY. Toyota Motor Manufacturing Kentucky - Wikipedia, the free encyclopedia

[DeadPhish]

I'm sure that we'll get the Prius made here soon but not all the components may be made here at first. My guess is that the Princeton Ind plant loses the Sequoia and Tundra and gets the Prius. Toyota has way too much production capacity in trucks now.

As to saving $5 - $10K per vehicle ..... it depends. For most of the last 10 years the currency factor has been about 120 / 1. A Prius sold here for about $25000, after netting out US Costs and margins as well as transport, probably 'cost' them $20000, or, about 2,400,000 JY.

So they build them in Japan at the rate of 2.4 million JY per vehicle sell them here and recoup their costs when the currency ratio is 120 / 1. But now the ratio is about 100 / 1.

So the same sale is made at about $25000 and the US costs are paid amounting to about $5000 resulting in a net sale again of about $20000. But now when they convert this back to JY they only 'receive' 2.0 million Yen. They've lost 400,000 JY. Now they have a 400,000Y 'loss' to apply.

But this is all on paper and only for the financial analysts. Actually what they do is keep the US$ here in US Banks and never convert the funds back to JY. Then when they or Japan, INC needs to buy something in US$ they just tap the funds stored in US Banks.

[Fred Wacksman]

Do you have any problems with your ventguards(WeaterTech)? Wind noise, mpg suffers, etc.?

[priusuk2008]

Originally Posted by DeadPhish

The currency factor is far more important. They'd save gobs of money making it here even at our 'elevated' rates. Remember those rates are only 'elevated' in relation to our own labor rates. Example

Two years ago lets say Otto in Germany and Joe in Detroit made the same rate for a basic 40 hours @ $30 / hour and 30 Euros / hour.

Today both make the same rates in their respective countries but where it took $1 to buy 1 E 2 yrs ago now it takes $1.50 to buy 1 E. Looking at it from a German ( or Japanese ) investor's pov..

Two years ago it took 30 Euros to buy $30 worth of labor in the US ( 1 hour ). today it only costs that investor 20 Euros out of his pocket to buy the same $30 of US labor. To him it looks like labor in the US is dirt cheap. He pays his worker in Mannheim 30 Euros/hr and he pays his worker in Detroit 20 Euros/hr. Nice business if you can react quickly enough.

Everything is dirt cheap here now; land, buildings, electricity, supplies, everything and unfortunately so are profits made here worth less and less.

This summer we should see a flood of Euro and Asian visitors here because everything in the US is on sale at 33% off.

So using exactly the same logic, do you see GM closing all their overseas plants and moving all vehicle manufacturing and assembly back to the USA?

I very much doubt it, but Toyota has more faith in your country than your own home-grown manufacturers and I also think they will build the next gen Prius in America somewhere - you are too big a market to keep shipping cars in (unless they all come from super-cheap China).