July 24, 2012 / 3:29 AM / in 5 years

Toyota may make more Lexus SUVs in Canada: source

Visitors are reflected in a logo of a Toyota Motor's Lexus car at a showroom in Tokyo July 4, 2010. REUTERS/Issei Kato

TOKYO (Reuters) - Toyota Motor Corp (7203.T) is considering making more Lexus RX sport-utility vehicles for North America in Canada by expanding production capacity there and transferring some output from Japan, a source with knowledge of the matter said on Tuesday.

Toyota’s plant in Ontario, Canada, is the only factory outside of Japan that makes Lexus models. In 2011, the plant produced 65,000 RX SUVs, the best-selling Lexus model globally.

Grappling with a strong yen that makes it more expensive to export goods from Japan, Toyota has gradually been transferring some of its domestic production abroad, saying in principle it aims to make products near markets in which they are sold.

But Japan’s biggest automaker has also repeatedly vowed to safeguard production of some 3 million vehicles a year in its home market, roughly triple the equivalent output at rivals Nissan Motor (7201.T) and Honda Motor (7267.T).

Toyota plans to boost output capacity at its plant in Canada in early 2014, and is considering transferring production of about 30,000 RX SUVs to Canada from its Miyata factory in southern Japan, public broadcaster NHK reported earlier on Tuesday.

Toyota produced about 81,000 RX SUVs at Miyata in 2011.

The total number of vehicles produced at the Miyata plant would likely be unchanged, as other models would be made instead of the RX, said the source, who declined to be named because he was not authorized to speak about the matter.

Toyota is set to make an announcement on the matter soon, the source said.

Earlier this month, the Miyata plant started production of the Lexus ES 2013 model, which will be exported largely to the United States and China, but will not be sold in Japan.

Reporting by Kentaro Sugiyama, Writing by Yoko Kubota; Editing by Chris Gallagher

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