Toyota Motor Corp. is contemplating to produce the Lexus ES 350 sedan at the company’s Kentucky factory by the year 2015. This production in the U.S plant will mark the Japanese auto major’s first time production of a model from its luxury lineup in the nation.
According to the reports, the Japanese auto manufacturer has announced on 19th of April that the company will invest a whopping $360 million at the Georgetown factory, which assembles the Toyota Camry and other models. This new model assembly will generate 750 new jobs and increase the production capacity of the factory by 550,000 units.
Toyota contemplates this production expansion in the U.S. as it follows the strategy to manufacture cars in the country where the buyers reside. This manufacturing expansion will also help the company to counter effect the strong yen that makes exporting from Japan expensive.
The president of Toyota Akio Toyoda has said that this decision of the company will serve Toyota’s U.S. customers, while it will also reduce the effect of the exchange rate on the customers.
The U.S. market is the world’s largest auto market for luxury vehicles. The Lexus was launched back in the 1990s and was readily accepted by the Americans consumers. However, lately the vehicle has lost its charm to the younger generation. To retain and regain its lost charm the Lexus is revamping the design of its vehicles to compete with other stylish rivals, especially in the form of Hyundai cars.
The executive vice president of Lexus, Mark Templin said that at present Lexus’s strategy of global expansion consists of attracting a vast audience and the only way to do so is to give a whole lot of stress and focus on design language of the models.
The present decision of Toyota to manufacture the Lexus brand models in the U.S itself makes a lot of practical sense, as seven out of every 10 vehicles of Toyota that are produced in the plants of North America is sold in that region itself. Moreover, the ES sedan was recognized as the second most popular Lexus model in the U.S in the year 2012. Thus, making the ES in the United States is a very practical decision from Toyota Motor.
Then again, Toyota does not sell the ES in the domestic car market of Japan, but manufactures the model in the country. The Japan plant will continue to build the Lexus to be exported to other regions excepting North America, when the U.S plant gets operational.
Toyota has revealed that manufacturing the Lexus ES in a North American plant will not only ensure the elimination of the import duty charges but also ensure a continuous supply of the model. Natural disasters such as earthquakes and tsunamis and other issues in Japan will not affect the model’s supply in the U.S market. Toyota also revealed that it received an offer of $146.5 million worth of tax breaks from Kentucky to increase the production capacity at its Georgetown plant.
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Tagged: 2013 Lexus ES
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