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Toyota Realizes Americans Can't Stop Buying SUVs

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Corolla sales are down, so what to do?

One of the ways Toyota and Mazda tried to minimize the risk of getting badly hurt by the Trump administration's protectionist trade policies was to join forces and build a factory in the US, where both would produce some of their hottest-selling models, avoid potential import taxes, and pin "Made In America" stickers on their vehicles before shipping them to dealerships.

That factory, called the Mazda Toyota Manufacturing U.S.A. (MTMUS) joint venture assembly plant, was announced in January of 2018 and is slated to be built in Huntsville, Alabama, less than 15 miles from Toyota's Huntsville engine plant. The $1.6 billion factory is designed to build 300,000 cars annually using 4,000 employees. But the question remained: which cars would be built there once the plant opens its doors in 2021?

Toyota had previously said it would build the Corolla at the plant, while Mazda was looking to build a still-unnamed SUV. Plans, however, have changed. Due to lagging sales of the Corolla and in the automotive market in general, Toyota has canceled plans to make the Corolla in Huntsville and will keep producing the car at its Blue Springs, Mississippi plant. But that means Toyota needs to find another high-volume vehicle to build in Huntsville to justify its investment.

Moreover, that vehicle will need to weather the downturn in the auto market in order to avoid an oversupply, which of course means the mystery vehicle will be an SUV. Toyota has yet to name or unveil the yet-to-be-announced SUV.

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Toyota's current SUV lineup is not exactly slim, with the CH-R, RAV4, Highlander, 4Runner, Sequoia and Land Cruiser filling the segment and breaking sales records, as the RAV4 just did. So what could Toyota possibly be lacking? Well, given how a number of industry players are mentioning a new focus on vehicles that focus on active lifestyles, our best bet would be that Toyota wants to build a small, affordable, and somewhat rugged SUV aimed at getting more millennials to the brand.

That could be a roadgoing version of the FT-4X SUV we saw debut at the 2017 New York Auto Show, especially given that the concept was 75% production ready when it debuted. We'll have to wait to learn if that'll end up being the case or not, but given that the plant will start building it in 2021, expect an announcement to take place in 2020.