Toyota to invest further US$1 billion to boost output at US plants
Trump has been pushing Japan and its carmakers to shift more production to America
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[DETROIT] Toyota Motor outlined plans to invest US$1 billion to increase vehicle output at its plants in two states, the latest tranche of a broader spending commitment of as much as US$10 billion in the US over the next five years.
The world’s largest carmaker said on Monday (Mar 23) that it will plough US$800 million into its factory in Georgetown, Kentucky, to boost production of its best-selling RAV4 compact sport utility vehicle and Camry sedan, as well as to manufacture a new electric vehicle. It will also earmark an additional US$200 million for its Princeton, Indiana, facility to increase capacity for its popular Grand Highlander midsize SUV.
The announcement comes just days after Japanese Prime Minister Sanae Takaichi made a visit to the White House, following up on US President Donald Trump’s trip to Tokyo in October, where word of Toyota’s larger investment pledge first became public. Trump has been pushing Japan and its carmakers to shift more production to the US and has imposed punitive tariffs on imports of vehicles and auto parts.
“Toyota’s investment in the US is for the long-term, tied to our philosophy of building where we sell and buying where we build,” said Mark Templin, the company’s North American chief operating officer.
Toyota declined to specify how many more vehicles will be produced at the two plants and a spokesperson said no new jobs will be created from the investment. The added capacity will help meet demand for the carmaker’s popular gas-electric hybrids at a time when petrol prices are rising due to the war in Iran. Both the Camry and RAV4 models are only offered as hybrids and more than half of Grand Highlander sales are hybrids.
Some of the US$800 million going into the Kentucky factory has already been spent on retooling an assembly line that previously built the luxury Lexus ES sedan, production of which was shifted back to Japan last year. Toyota currently produces three high-end Lexus models in North America, the TX midsize sedan in Indiana and the Canadian-made NX compact crossover and RX SUV.
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In November, Toyota said that it would invest US$912 million to increase output of hybrid components and vehicles at its Kentucky plant and other production facilities in Mississippi, Missouri, Tennessee and West Virginia.
The investment decision followed Trump’s singling out of Toyota by name in April for importing too many vehicles from Japan to the US, and evokes a similar pledge made by Toyota in 2017 during his first administration.
That earlier promise by the Japanese automaker was to invest US$13 billion on its US operations. Toyota said that it spent those funds and that its total investment in the US exceeds US$50 billion, spread over nearly seven decades. BLOOMBERG
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