Toyota to shift all Yaris output for North America from Aichi to France

Kyodo

Toyota Motor Corp. plans to transfer production of the Yaris compact for shipment to North America from a domestic plant to France next May.

The move is aimed at countering the yen’s surge against the dollar, which at around ¥80 to the U.S. currency has slashed the profitability of exporting the Yaris from Japan, a senior Toyota official said Friday.

“We face a severe environment in terms of profitability” due to the yen’s appreciation and high shipping costs stemming from rising crude oil prices, the official said.

It will be the first time Toyota has exported vehicles to North America from a production facility in Europe.

The automaker will shift manufacture of about 25,000 Yaris vehicles a year from a plant in Aichi Prefecture run by group firm Toyota Industries Corp. to a factory in Valenciennes, northern France.

Other officials at Toyota said that despite the move, Toyota intends to stick to its strategy of maintaining domestic production at more than 3 million units per year.

The Aichi plant will keep making the Yaris for export to Australia and the Middle East, as well as the Vitz, as the car is known in Japan, for the domestic market.

To manufacture Yaris models for North America, Toyota will invest about €8 million (¥810 million) in the French plant, which currently turns out about 160,000 of the vehicles a year for the European market.

Manufacturing the Yaris in the United States would be the optimal solution but the model’s low annual sales volume of around 20,000 to 30,000 units means establishing a new local production line would not be profitable, the senior Toyota official said.

Toyota has accelerated moves to shift production abroad. Earlier this year, it announced it would transfer production of its Highlander sport utility vehicle from Japan to the United States.