Like to go ‘upstream’, Toyota poured hundreds of millions of dollars to develop internal combustion engines

According to Carscoops, Japanese automaker Toyota has a strategic investment strategy with a significant budget in its production facilities in the US to develop a new 4-cylinder internal combustion engine. Specifically, the investment level for 4 factories in 2022 is expected to be 383 million USD (nearly 9,000 billion VND).

The Huntsville Alabama plant will receive the largest investment, $222 million, to create a new four-cylinder engine production line for both internal combustion and hybrid engine options. The facility is currently capable of producing 900,000 engines annually, and the investment will include the expansion of more than 10,000 square meters of the plant.

$109 million will be invested in the Troy plant in Missouri to secure the supply of new cylinder head manufacturing equipment. Meanwhile, the Jackson plant in Tennessee will receive $36 million for the development and production of the new engine.

Like to go 'upstream, Toyota poured hundreds of millions of dollars to develop internal combustion engines - Photo 1.

Ultimately, $16 million will go to Toyota’s largest plant in Georgetown, Kentucky to expand production. The facility received an investment of $461 million in October 2021 and is currently producing about 600,000 powertrains annually for both Toyota and Lexus models.

Toyota is currently stably producing a number of 1.8, 2.0 and 2.5 liter four-cylinder internal combustion engines, excluding the Subaru-made four-cylinder engine fitted to the GR86 model. The above $400 million investment shows that the Japanese brand is looking to create a new internal combustion engine block.

Like to go 'upstream, Toyota poured hundreds of millions of dollars to develop internal combustion engines - Photo 2.

However, Toyota is not the only company “upstream” when investing in the development of new types of internal combustion engines. In a talk with Germany’s Auto Motor und Sport taking place in the summer of January 2022, Frank Weber – BMW’s development director – said: BMW is developing a new generation of internal combustion engines, including the line 6-cylinder and 8-cylinder gasoline/diesel engines. At the same time, BMW CEO Oliver Zipse also said: Don’t be too dependent on electric cars when cars equipped with internal combustion engines run on gasoline and oil are still alive.

In Vietnam, Toyota will conduct an increase in a series of car models in the domestic auto market. In this proposed retail price adjustment, Toyota will increase the prices of a total of 9 models of both imported and locally assembled cars, applied from May 1, 2022.

In which, the highest increase in the price of Toyota Vietnam cars of VND 40 million applies to Land Cruiser, Land Cruiser Prado and Alphard models. As for locally assembled cars such as Vios, Innova, the increase is lower from 5 to 6 million dong.

The models that do not increase prices next time are Toyota Wigo, Corolla Altis, Avanza Premio, Veloz Cross, Fortuner. While models like Toyota Hilux, Rush no longer have cars for sale. Thus, currently, customers will have one month left to buy Toyota models with prices that have not been increased.

Most of the upcoming models that will be adjusted by Toyota Vietnam will have quite good sales and high market share compared to competitors in the same segment. However, with Toyota Vios, this model is currently significantly more expensive than Hyundai Accent and the difference will be larger after May 1. Similarly, the highest version of Toyota Innova after price adjustment will reach nearly 1 billion dong, while the selling power is not too impressive.

In fact, some models such as Toyota Corolla Cross or Raize have previously been sold by dealers at higher prices than suggested prices for customers who want to receive the car soon. As for the Toyota Land Cruiser, due to “out of stock” globally, it also costs billions of dong.

Toyota Vietnam explained that the price increase adjustment depends on many factors, based on each period as well as the strategy of each car line. Meanwhile, dealers said that the reason was due to the increase in the price of materials, semiconductor chips, and transportation fees, so they had to increase the price of the car to cover the cost.

According to Khanh Vy

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