Toyota Motor Corp. has kept production of its hybrid powertrain parts in its Japanese plants for many years but now, it has decided to make these parts in the U.S. and in other overseas locations in four years. Toyota is making this move to boost the sales of hybrid vehicles globally.
Toyota wants to raise the sales of the gasoline-electric cars through overseas assembly and making hybrid batteries, electric motors and inverters outside of Japan is considered as the next step to achieve this target.
In an interview with Automotive News, Shinichi Sasaki, Toyota’s executive vice president in charge of global purchasing, said that currently, hybrid component production is “too biased toward Japan.”
He said that under the new strategy, the parts will be built at production centers around the world. These parts will then be shipped to hybrid vehicle assembly plants located in different countries. It’s likely that the parts will be produced in North America and other markets like Southeast Asia and China.
He said that Toyota will have to formulate a tactic within a year that may be seen in its next-generation procurement policy. This implies that this could be executed in about three or four years.
Batteries, inverters and motors are sourced by Toyota only from Japan, where the majority of its hybrid vehicles, such as the Prius, are built. Toyota is ramping up the assembly of hybrid units overseas because parts imported from Japan are subject to fluctuating and unfavorable exchange rates.