Lexus ES to be Built in North America?

2013 Lexus ES Production

The possibility of Lexus ES production moving to North America continues to build momentum — from the Wall Street Journal:

Toyota Motor Corp. is considering shifting more production to North America from Japan to ease the impact of the rising yen, even after the Japanese auto maker posted strong quarterly earnings.

“The ES is now built out of Japan, so that would be something we would look at,” [Jim Lentz, Toyota’s U.S. chief] said about the second-highest volume vehicle in the Lexus lineup. “Everything is on the table.”

Toyota’s Georgetown, Ky., plant is a likely candidate if the auto maker were to move production to the U.S. The factory now produces the Camry, which shares the same underpinnings as the Lexus ES. Mr. Lentz declined to say whether the company would build a new factory in the U.S.

Reuters also weighed in:

Lentz said that in addition to the strong yen, moving production was “being driven” by engineering capabilities in the United States, including at Toyota’s engineering center in Ann Arbor, Michigan, where more than 1,100 engineers are employed.

Japan on Tuesday said it would extend its dollar credit facility, aimed at helping companies invest overseas, by six months as part of its efforts to cope with the strong yen.

This would suggest that if Lexus is serious about shifting ES production to North America, it could happen sooner than later — setting up a new manufacturing facility is an expensive endeavor, and financial assistance from Japan may be the incentive necessary to make it happen.

One other noteworthy fact from the WSJ article:

Toyota announced two weeks ago plans to stop exporting the Lexus RX to North America from Japan, building all of the vehicles in North America. The company will invest $98.3 million to boost production capacity at its Cambridge, Ontario, plant as soon as 2014.

Didn’t realize that the expanded RX production at the Cambridge plant would be enough to satisfy all North American demand — that’s quite a significant accomplishment.

[Source: Wall Street Journal Image:]