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Did you know that Toyota currently manufactures around 70% of its models sold in North America in North America?
Jim Lentz, President and CEO of Toyota Motor Sales USA, states, "With the Yen where it is today, I think it's only a matter of time.", reffering to increasing North American production at an auto industry conference this past week.
The strength of the Yen has hit Toyota hard, upping the pressure for Toyota to stay lean and become innovative.
Toyota is currently in the process of hiring 3,500 workers in North America while investing over 1.5 billion dollars in its factories in North America. A hedge bet againts the value of the Yen.
The company doesn't have firm plans to shift production of more models from Japan to North America, he said. But one model Toyota would consider building here is the Lexus ES series.
Toyota, like other manufacturers, would make changes to squeeze more production out of existing plants rather than building new buildings, he said. A new plant costs about $1 billion, Lentz said.
Toyota still thinks automakers can sell 14.3 million vehicles in U.S. this year, he said, even though sales have slowed the past two months, and some analysts have cut their forecasts. But Lentz said pent-up demand should prop up sales. The average vehicle in the U.S. is nearly 11 years old, and people have to replace their aging rides.
Toyota, he said, has fully recovered from the March 2011 earthquake and tsunami that hobbled its Japanese factories and caused model shortages worldwide. In the U.S., the company's dealer inventory dropped to around 120,000 vehicles last summer. Now it's back to 299,000, which is near the 300,000 that Toyota considers optimal.
Lentz also said discounts are starting to surface in the luxury market, which has dropped to around 10 percent of total U.S. sales this year. Normally it's around 12 percent, he said. But although discounts may rise, Lentz doesn't think an all-out price war will break out.
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