Toyota invests over $50 million in Arizona proving grounds expansion

WITTMANN, Ariz. - Toyota Motor North America, part of the $223.6 billion market cap automotive giant Toyota (NYSE:TM), has broken ground on more than $50 million in new construction at its Arizona Proving Grounds, the company announced Wednesday. According to InvestingPro data, Toyota maintains a strong position in the global automotive market with annual revenue exceeding $320 billion.

The expansion includes a 5.5-mile oval track, an off-road park, and new ride and handling surfaces. Most of the new construction will be completed later this year, with Toyota also planning a future facility for advanced driver assistance technology development. This investment comes as Toyota, currently trading at an attractive P/E ratio of 6.87, continues to maintain its 46-year streak of consistent dividend payments.

The facility, formally named the Arizona Mobility Test Center at Toyota Arizona Proving Grounds (AMTC at TAPG), has been available to industry for vehicle testing since 2021 under Toyota’s ownership.

"The new investment in Arizona signals the facility’s importance to Toyota," said Stefan Young, Vice President at Toyota Motor North America’s Research and Development.

The investment encompasses seven different projects, including a completed noise pass-by testing area, the oval track, a 1.5-mile ride and handling course, and a 1.3-mile loop road. Additional projects scheduled for completion by 2026 include a 1.7-mile north straight, an off-road park, and a 17-acre VDA resurface.

Since opening to outside companies, the facility has hosted 37 different organizations with approximately 286 test vehicles conducting about 203,400 hours of testing.

Located near Wittmann, approximately 60 miles northwest of Phoenix, the proving grounds covers about 11,650 acres with 77 miles of testing surfaces. Toyota established the facility in 1993, using it to test more than 50 Toyota and Lexus vehicles for the North American market.

The facility is managed by Intertek Transportation Technologies, which oversees administration, rental operations, and tenant services.

According to the press release statement, Toyota (NYSE:TM) directly employs nearly 64,000 people in North America and has contributed to the design, engineering, and assembly of nearly 49 million vehicles at its 14 manufacturing plants in the region. Trading at $17.06 per share, Toyota’s stock has shown resilience with a beta of 0.25. InvestingPro subscribers have access to additional valuable insights about Toyota’s financial health and growth prospects, including several more exclusive ProTips.

In other recent news, Toyota Motor North America reported that electrified vehicles accounted for 48.1% of its total sales volume in the second quarter. The automaker sold 666,469 vehicles during this period, marking a 7.2% increase from the previous year. Notably, electrified vehicle sales surged by 29.7%, reaching 320,817 units. In a strategic shift, Toyota Group announced plans to privatize Toyota Industries Corporation as part of its transformation into a mobility-focused company. This restructuring involves a tender offer for shares and the establishment of a new holding company, with significant financial backing from Toyota Group companies and Akio Toyoda. Additionally, Toyota’s global sales and production have risen for the fourth consecutive month, with April sales reaching 876,864 vehicles, a 10% increase year-on-year. Hybrid vehicles played a crucial role, making up 44% of Toyota’s worldwide sales in the first four months of the year. The company’s global production also saw an 8% rise, driven by increased output in several regions, including Japan and North America.

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