Toyota put a lot of things on hold the past few years, when its sales were devastated by recalls, the earthquake and tsunami in Japan, and supply problems due to floods in Thailand. But now, it appears to be back on a production march that could affect the Midwest.
Last week, Toyota’s North American president, Yoshi Inaba, said the company was looking at expanding production in North America, including building more vehicles at its plants in Ontario, just a few hours from Detroit in southwestern Ontario.
According to the Globe and Mail, those steps would include producing its Prius hybrid models in North America for the first time and boosting production of Lexus models at its Cambridge, Ontario factory.
The steps have a direct effect on our region, because Toyota has hundreds of engineers in Michigan, and parts suppliers all over the Midwest. It also has a big assembly plant in Princeton, Ind., which just built its 3 millionth car, and where Toyota is investing another $400 million.
A spokesman for Toyota is cautions that nothing is imminent. But Inaba speaking with reporters at the Canadian International Auto Show in Toronto, said Toyota has to consider shifting production because the Japanese yen is so strong.
Using North American plants to assemble the Prius “almost like – to me – a no brainer,” Inaba said during an auto show lunch. He said he’s pushing for a decision as soon as possible on whether to do that, and where.
Toyota was going to build the Prius at its newest factory in Blue Springs, Miss., but it decided to build its compact Corolla there instead. Prius, which started out as a four-door sedan, now is part of a family that includes a subcompact and a bigger crossover vehicle. Many analysts think that if production goes well in Blue Springs, it is still the most likely place to build one of the Prius models.
The Cambridge plant makes the Lexus RX350, which Toyota also builds at a factory in Japan. Inaba said it’s possible the automaker could move all its RX production to Canada.
“The exchange rate plays a very important role in our business decisions, that’s why we are considering all the possible scenarios of trying to mitigate the impact,” Inaba said, according to the Globe and Mail.
The yen is at a near-record high of about 78 to $1. A decade ago, the yen traded at around 135 to $1.