Toyota Restructures US Lexus Production In Response To Tariff Pressures

Toyota Motor Corporation will consolidate its two Lexus production plants in the United States into a single facility, responding to tariff pressures that emerged under former U.S. President Donald Trump's administration, Nikkei reported on Tuesday. The move is part of a broader strategy to strengthen hybrid vehicle production in the U.S. while shifting some luxury Lexus manufacturing back to Japan, Azernews reports, citing foreign media.

Currently, Toyota produces the Lexus ES sedan at its Kentucky plant and the Lexus TX SUV at its Indiana facility. Production of the ES in Kentucky will be phased out after current orders are fulfilled. The next-generation ES model will be manufactured in Japan and exported to the U.S. market. Following the consolidation, the Indiana plant will become Toyota's sole production site for Lexus vehicles in the U.S.

In addition to its U.S. operations, Toyota will continue producing two Lexus models at its Canadian plant.“We choose production sites based on pricing strategies and market conditions,” Toyota's U.S. division said in a statement.

This consolidation reflects Toyota's focus on supply chain optimization and cost efficiency amid shifting trade policies, while also aligning with the growing demand for hybrid SUVs in the North American market. Interestingly, the decision may also signal a broader trend among automakers to rethink their global production footprints in an era of increasingly complex geopolitical and economic challenges.

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