Home » Reports say Lexus ES will be new production model at Georgetown Toyota plant

Reports say Lexus ES will be new production model at Georgetown Toyota plant

LEXINGTON, Ky. (April 18, 2013) — Reuters reports this morning that Toyota plans to bring production of the luxury Lexus ES model to Georgetown, Ky.

News agencies are reporting that the Toyota plant in Georgetown, Ky., will being making the Lexus ES.
News agencies are reporting that the Toyota plant in Georgetown, Ky., will being making the Lexus ES.

The Kentucky Economic Development Finance Authority conducted a special meeting Wednesday to OK up to $146.5 million in tax incentives for Toyota over the next 10 years if the company fulfills yearly goals for investment and hiring.

The company this morning sent out media notices that is would make a production announcement Friday at its 1,300-acre Toyota Motor Manufacturing Kentucky facility, the Japanese vehicle maker’s largest North American site, where 6,100 workers now build 500,000 Camrys, Avalons and Venzas.

A Toyota source reportedly told Reuters the Lexus ES will go into production in Georgetown beginning in 2015. The facility eventually will produce as many ES cars as Toyota sells in the United States and Canada, which last year added up to 59,000 cars, the source said. The ES hybrid variant will still be made exclusively in Japan, he added.

Toyota officials are making no official public comment yet.

Expanding output at the Scott County facility would fit with the automaker’s strategy of adding capacity at existing plants rather than breaking ground at new locations, according to Reuters. Toyota previously had said it would freeze plans for any new plants for the next three years.

Toyota does not sell the ES in Japan. It was the second most popular Lexus model in the United States in 2012 after the RX SUV, which has been built in Canada for several years.

Strategy linked to Japanese currency costs

When the new ES went on sale last year, Toyota executive Kazuo Ohara said the company was aiming to sell about 10,000 of the vehicles a month, including 5,000 in the United States and 3,000 in China, according to the Reuters article. Overall, Toyota wants to sell about 500,000 Lexus vehicles globally in 2013, 23,000 more than last year, that article states.

The expected Friday announcement reflects improvement for Toyota in the key U.S. market, where it has been rebounding from recalls, litigation and rivals such South Korea’s Hyundai Motor Co. competing hard for market share. Toyota’s U.S. sales rose 27 percent last year and 9 percent in the first three months of 2013 compared with the same period last year, the company reported this month.

Toyota and other Japanese automakers have been shifting production of vehicles into the markets where they sell them to counter a strong price of the yen currency, which made exporting from Japan expensive. The yen’s decline since late last year has not changed that strategy.

The terms of state tax incentives approved preliminarily Wednesday by the KEDFA board state that Toyota is developing plans for a $531 million expansion of its TMMK manufacturing operation. It proposes creating 750 new full time jobs to the present 6,169 full-time Kentucky-resident jobs in Scott County where it builds the Camry, Camry Hybrid, Avalon, Avalon Hybrid and Venza as well as machining and assembling four-cylinder and V-6 engines, axles, and steering and engine components.

Tax incentive goals require maintaining a minimum of 570 additional full-time Kentucky-resident jobs for a total of 6,739 in each of the 10 years to receive reduced state and local tax bills.