Toyota invests $545M in Ontario plants

CAMBRIDGE, Ont.—Toyota Canada will invest $545 million to make upgrades at its assembly plants in Cambridge and Woodstock.

The Ontario and the federal governments will each make a $70.8 million repayable contribution to Toyota Motor Manufacturing Canada Inc. Toyota’s total investment in the project could reach up to $506 million.

“The strong support that we have received from both the federal and provincial governments is very important because it allows us to give these initiatives priority and helps to secure our production footprint in Canada,” said Ray Tanguay, chairman of Toyota Motor Manufacturing Canada.

The round of upgrades will support production of cleaner, more fuel efficient vehicles at Toyota’s Ontario plants. Toyota will use part of the money to upgrade the paint shop at Toyota’s Cambridge North plant. The company plans to convert its base-coat paints from a solvent-based system to a water-based system to reduce emissions.

It will also make other plant upgrades, including new machinery and equipment, employee training, and projects to increase efficiency and reduce waste.

The announcement comes as Canada’s top automakers are reporting a big bounce-back in June sales over May.

Overall, the sales in the industry were up 6.6 per cent to 164,796 from 154,565 a year ago, according to data compiled by DesRosiers Automotive Consultants. That was an industry best since at least 2004.

“Car and light truck sales bounced back in June, rebounding from a weak performance in May, when purchases were undercut by negative headlines emanating from the European sovereign debt crisis,” said Carlos Gomes, an auto analyst at Scotia Capital.

“Several automakers reported record sales last month. With manufacturers maintaining enhanced incentives in July, the Canadian auto market promises to remain hot through the summer.”

Ford Canada claimed the top spot with June sales that increased six per cent to 33,450 from 31,707 from year-earlier levels, its best June since 1989.

General Motors Canada, Canada’s second-best selling automaker last month, said sales grew 12 per cent from a year ago, led by its Chevrolet Cruze and other fuel efficient vehicles. The company reported total sales of 27,865 vehicles, compared to 24,897 a year earlier.

Chrysler Canada reported the largest improvement from year ago, reporting that sales soared 27 per cent to 23,576 vehicles from 18,502 a year ago. That was its best June since 2005.

Meanwhile, many Japanese automakers saw another decline in monthly sales, DesRosiers found. Toyota Canada saw a nearly 28 per cent drop to 10,564 units from 14,607. Suzuki sales fell 37.4 per cent to 457 from 730 a year ago. Mazda sales dropped three per cent to 7,010 from 7,218 a year ago.

Honda Canada said its sales, including the luxury Acura model, fell by 19 per cent to 9,584 vehicles.

Luxury automaker BMW Group Canada saw sales jump 19 per cent over June 2010 to 4,164 vehicles, while Porsche Canada sales were up 34.4 per cent to 242 from 180 a year ago, according to DesRosiers.

Volkswagen Canada sales grew 11.8 per cent to 5,006 from 4,479. Hyundai sales were up 17 per cent to 13,435 from 11,501. Kia sales grew 21 per cent to 7,077 from 5,864 20, the auto analyst said.

The auto industry supports about 400,000 jobs across Ontario.

Photo: Toyota Motor Manufacturing Canada.