Toyota considering shifting production of South Korea-bound Camry to the U.S.

Article by Christian A., on September 28, 2011

To help reduce export costs, Toyota Motor Corp. is thinking about moving the production of South Korea-bound Camry autos from Japan to the U.S., according to a report from the Nikkei business daily. The pressure to cut costs stems from the historically strong yen that’s felt by Japan's export-oriented manufacturers as well as from a free trade agreement between the U.S. and South Korea.

Mike Goss, the spokesman for Toyota's North American manufacturing operations in Erlanger, Ky., said that there has been no decision yet on whether to export the Camry to Korea. Two U.S. plants build the Camry.

One is in Georgetown, Ky., while the other one is in the Subaru of Indiana Automotive Inc. factory located in Lafayette Ind. For years, Toyota has had a difficult time of coping with the demand in the U.S. for the model, says Guardian.

It has increased the capacity of its factories and has imposed overtime as Camry sales have exceeded 35,000-40,000 units a month. It continues to be the top-selling car in the U.S. However, its sales have fallen below 26,000 a month on average for this year through August as supplies were disrupted by the March 11 disaster in Japan.

Toyota offered a redesigned Camry for the 2010 model year. In the past, Toyota has exported its U.S.-built vehicles to Taiwan, Europe and other markets but this year, it has so far sent around 5,800 Avalons to the Middle East.

At a record high trading of 75.92 last month, the yen is getting stronger and this reduces the foreign earnings of Japanese exporters as it raises the prices of their products overseas. But even so, Toyota has made a promise to retain a minimum level of production in Japan to protect manufacturing.

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