DETROIT — The Toyota Motor Corporation is expected to announce on Friday that it will expand production at its plant in Kentucky, most likely adding a line for the Lexus sedan, which has not before been built in the United States.
Toyota’s president, Akio Toyoda, will make the announcement in New York, where he is also scheduled to attend a Lexus brand marketing event.
Mr. Toyoda is expected to detail a plan to build the Lexus ES sedan in Georgetown, Ky., according to a person with knowledge of the plan who was not permitted to comment publicly before the announcement. Kentucky has been competing for the expansion, and has offered Toyota $146.5 million in state and local tax incentives, The Louisville Courier-Journal reported this week.
The state’s governor, Steve Beshear, will also be making an announcement on Friday at the Georgetown plant with Toyota officials.
While Toyota currently does not build any Lexus models in the United States, it does make the brand’s RX sport utility vehicle at its Lexus plant in Ontario, Canada, which is also expanding to accommodate a hybrid version of the S.U.V.
The additions of new production lines underscore the stiff competition among leading automakers in the United States, where sales of luxury cars have been growing faster than other auto sales. In the United States, sales of Lexus models improved by 15.6 percent through March of this year.
The expansions reflect Toyota’s wide-scale efforts to overhaul its luxury products, including a redesign of its Lexus models to appeal to younger drivers and to try to lure customers away from top-selling luxury rivals BMW and Mercedes-Benz. Toyota had been the best-selling luxury brand in the United States for 11 consecutive years until 2011. But in recent months, Toyota unveiled new versions of Lexus models that feature bolder styling, better safety features and more powerful engines.
Building a Lexus model in America for the first time could help burnish the brand’s image.
The Lexus entry into production in Kentucky and the expansion in Canada are both expected to add jobs, and both are occurring with the help of government subsidies.
The Louisville Courier-Journal said the incentives would be offered in exchange for retention of at least 6,100 full-time jobs, and that possibly as many as 750 new jobs could be added. Of the 750 jobs, 180 would be variable and contract workers, the newspaper said in describing conditions set by the state’s finance authority. The remaining 570 positions were used to calculate the state’s $146.5 million incentive offer involving a total of 6,739 jobs, according to the report.
In Canada, Toyota said it would spend $125 million to expand its plant in Cambridge, Ontario. The investment, which includes government loans of $34 million, will increase Lexus production in Canada by 30,000 units, to 104,000 a year. About 400 new jobs will be created when the expansion is completed next January.
A top Lexus sales executive, Timothy Morrison, said at a media event in Detroit last year that the brand was not necessarily set on regaining the top spot among luxury cars.
“We don’t care who is No. 1 at the end of the year,” said Mr. Morrison. “Being No. 1 with the customer is what we need to focus on.”
Another Japanese automaker, Nissan, is planning to build its first Infiniti luxury model in the United States at a plant in Tennessee. In that case, the American plant beat out Nissan plants in Japan for the assignment.
Ian Austen contributed reporting from Ottawa.
Article source: http://www.nytimes.com/2013/04/19/business/toyota-said-to-plan-to-make-lexus-es-in-kentucky.html?partner=rss&emc=rss