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  • Toyota to Import More SUVs from Japan, Canada on U.S. Demand

Toyota to Import More SUVs from Japan, Canada on U.S. Demand

Company Freezing New Plant Construction Until 2016

Jan 14, 2015
In yet another example that highlights the enduring popularity of SUVs, Bloomberg is reporting that Toyota will increase production at its plants in Japan and Canada to keep pace with U.S. demands for its SUV models, rather than build new factories.
The highest demand is for the compact RAV4 and the Lexus RX. Production of both models is sourced from two plants in Japan and Canada. The addition of the smaller Lexus NX crossover has also increased overall demand for the company’s SUV models.
Toyota has a self-imposed moratorium on building any new plants until March 2016, at which point the company will re-assess overall demand for its products and determine if building another factory is necessary to meet sustained demand. Increasing capacity at existing plants is typically the preferred option for most companies in the short-term, as it is far less capital-intensive than building a new plant from the ground up, which can cost in the hundreds of millions of dollars. Plants that build multiple models can also often change the proportion of their output to make more of hot-selling models and less of slower-selling models.
Toyota’s retention of the world’s best-selling car company is credited by many with the company’s strong U.S. sales performance over the last several quarters, much of that attributed specifically to SUVs.
Source: Bloomberg

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