Toyota readies U.S. production of Lexus ES by 2015
By Dhanya Skariachan
NEW YORK (Reuters) - Toyota Motor Corp (7203.T: Quote) plans to assemble the Lexus ES 350 sedan at its Kentucky plant in 2015, marking the first time the Japanese automaker has built a vehicle from its luxury lineup in the United States.
Toyota said on Friday it will invest $360 million at the Georgetown factory, which makes the Toyota Camry and other models. The move will create 750 new jobs and boost the plant's production capacity by 10 percent to 550,000 vehicles.
Expanding U.S. production fits in with Toyota's strategy to make cars in the markets where its customers live. The move also counters the effect of the strong yen, which has made exporting from Japan expensive.
"This decision is in line with two key goals," Toyota President Akio Toyoda said at a news conference in New York. "First, to serve our U.S. customers. And second, reduce the effect of the exchange rate on our customers."
The U.S. market is the world's largest for luxury vehicles. In an interview, Jim Lentz, head of Toyota's North American operations, predicted economic growth of about 2 percent, similar to 2012.
Toyota was offered $146.5 million worth of tax breaks from Kentucky to add production capacity at the Georgetown plant, a source previously said.
"If you look at Kentucky, it's our oldest plant," Lentz said, when asked if the ES could be made in any other Toyota plant in North America.
"We have the most experienced team members working in that plant," he said. "So I think it will be Kentucky. I don't see us fractionalizing Lexus in different plants." Continued...