2013 Lexus ES Manufacturing Starts in Japan

Lexus ES 300h Japan Production

The 2013 Lexus ES started production today at the Miyagi Plant in Japan, and Reuters is reporting that there’s no immediate plan to produce the model elsewhere:

Toyota, Japan’s top automaker, has made it a goal to safeguard production of some 3 million vehicles a year in its home market…about 40 percent of the cars and trucks Toyota builds globally.

Lexus is key to that commitment.

The Lexus strategy leaves the brand more exposed to foreign exchange than Toyota’s mainline brand, but Toyota officials said the made-in-Japan strategy would pay off even at current yen levels.

“We have no plans to endure to a point that our business won’t function. But for cars like the ES, we are seeing cost levels that will allow us to continue producing even if the yen is at 80 yen against the dollar,” said Kazuo Ohara, executive vice president of Lexus International.

“Our policy is to protect manufacturing in Japan as much as possible for as long as possible,” Ohara said.

There has been speculation that the ES production might come to North America, and that likely remains a strong possibility:

“At some point Toyota may have to move production abroad to compete on the cost front,” said Masatoshi Nishimoto, the manager of Japan and Korea vehicle forecast at IHS Automotive.

Nishimoto said Toyota could make such a move within five years and keep its high-profile domestic production target if it can drive sufficient global sales growth in the interim.

Lexus is expecting the new ES to grow global demand for the model by more than 60 percent, with sales projected at 10,000 ESs sold a month (including 5,000 in the United States and 3,000 in China) — this might provide the type of demand necessary to shift some of the production to North America.

[Source: Reuters]