Lexus starts producing ES sedan in Japan despite Yen risks

Article by Anita Panait, on July 6, 2012

Toyota Motor Corp. has started building its revamped Lexus ES sedan in Japan, taking on the challenge of running more costly factories at its home country to cope with demand in the United States and China. Toyota is aiming to achieve an annual production figure of around 3 million vehicles in Japan, which is almost triple the amount that its local rivals Nissan Motor Corp. and Honda Motor Co. produce.

It also represents around 40 percent of the cars and trucks that Toyota builds globally. The only Lexus model that Toyota produces outside Japan is the Lexus RX sport-utility vehicle, which is being built in Ontario, Canada.

Japanese car manufacturers are usually averse to producing at its home turf in order to prevent the strong yen to continue eating up their profits on imports. Toyota’s strategy with Lexus leaves the brand exposed to the effects of the strong yen.

Toyota officials, however, are confident that the made-in-Japan strategy would pay off even at current yen levels. Kazuo Ohara, executive vice president of Lexus International, said that they have no plans to endure the effects of the Yen to a point that the unit’s business would not function.

Ohara remarked that for cars like the Lexus ES, the current costs levels will allow the brand to continue producing even if the exchange rate is 80 Japanese Yen to a US Dollar.

Ohara reiterated that Lexus’ policy is to protect manufacturing in Japan “as much as possible for as long as possible.” Masatoshi Nishimoto, the manager of Japan and Korea vehicle forecast at IHS Automotive, quipped that Toyota, at some point, may have to stop production abroad to compete on the cost front, just like rival Nissan.

If you liked the article, share on:

Pin It

Comments

Recommended

South Korean car company SsangYong recently revealed sketches of their upcoming SUV. We’re not always impressed by Korean car designs, but this one looks quite promising. Yup, it is the...
by - March 26, 2017
Twenty-eight years after the company was first launched by Toyota, which was initially targeted to the United States market only, Lexus has already made its way to over 70 countries....
by - March 26, 2017
Last year was probably Porsche’s best year ever in terms of sales. Their factory in Stuttgart delivered 237,778 cars in total, which represents a six percent increase compared to the...
by - March 26, 2017
Lamborghini has disclosed that it is looking into the possibility of releasing electric vehicles. With the Volkswagen Group revealing that it will be releasing electric vehicles within several years, there...
by - March 25, 2017
Daimler AG, through its Smart division, has disclosed that its two electric models, the Smart ForTwo and the Smart ForFour are now open for orders in Germany. Official market launch...
by - March 25, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries