Toyota Motor Corp. is going ahead with its plans to swiftly expand its production and sourcing in North American production. It also hopes to proceed to transfer the production of at least one vehicle from Japan to the continent. As proof, Toyota last week sent updated production forecasts to its suppliers, telling them of plans to increase its North American vehicle production to record levels for each of the next three years. According to the updated production forecasts, Toyota is expecting to produce up to 1.8 million vehicles in North America in 2012, after which it will add another 130,000 vehicles to the figure through early 2014.
Robert Young, vice president of purchasing for Toyota Motor Engineering & Manufacturing North America Inc., said that the carmaker still have more “upside flexibility” from a production standpoint in North America. According to Young, Toyota has been expanding engine and transmission production in Kentucky, Alabama and West Virginia to get ready for a sales revival. Toyota product planners are also mulling whether to transfer the production of at least one Japanese vehicle, and possibly others, to a North American plant to ease the effect of the strong yen.
The company’s current effort to move production out of Japan underscores the carmaker’s determination to avoid the profit-eating impact of the yen's strength against the US dollar. A strong yen cuts the price competitiveness of Japanese products exported to North America because companies lose money on vehicles they export from Japan.