Toyota Shifts Some Hybrid Production to U.S.

Features Reuters

Toyota Motor Corp will shift production of its Highlander hybrid sport-utility vehicle from Japan to Indiana, where the Japanese automaker will invest $400 million to expand its factory and add 400 new jobs.

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Toyota now makes the Highlander and Sequoia SUVs and the Sienna minivan in Princeton, Indiana, where the company now employs nearly 4,000 workers. Toyota plans to export some of those Highlanders to other countries.

With the expansion, Toyota will be able to build an additional 50,000 hybrid and gas-powered Highlanders, Yoshi Inaba, president and chief operating officer of Toyota's North American operations said during the Chicago auto show on Wednesday.

During his remarks, Inaba touted the economic impact of the expansion and said each auto job would create three and a half "spin-off" jobs. Last year, Toyota opened a new plant in Mississippi to make Corolla cars that were built in Japan, creating 2,000 new jobs.

"As a result of moving Highlander hybrid production to Princeton from Japan and expanding capacity for the gas model, we will create 400 more American jobs and many more at our U.S. suppliers," Inaba said.

Toyota is readying a burst of new models due in the United States this year that the automaker hopes will help it regain lost ground after a tough 2011 marred by production losses in the wake of the March earthquake in Japan.

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Last week, Toyota officials noted that competition in North America has stiffened this year as the Detroit automakers improve their quality.

The move also comes as Toyota and other Japanese companies are also seeking ways to temper the effect of the strengthening yen against the U.S. dollar.

The soaring yen makes it cheaper to buy commodities and potentially buy overseas assets, but it also diminishes earnings from major auto markets such as the United States.

In November, President Akio Toyota said the company may "deepen alliances with suppliers and dealers" to offset the yen.