Toyota will produce Lexus NX in Ontario to supply North America – Automotive News Canada

Toyota will produce Lexus NX in Ontario to supply North America - Automotive News Canada

Toyota to begin producing Lexus NX in Canada in 2022

OTTAWA — Toyota Motor Corp. will produce the Lexus NX and the hybrid version of the NX at its Cambridge, Ont., plant.

Toyota Motor Manufacturing Canada will build the vehicle for the North American market starting in 2022, the Japan-based automaker and Ontario government said Monday.

Toyota will have extra capacity at the plant after announcing in March that it would shift production of the hybrid RAV4 SUV in Cambridge to its plant in Georgetown, Kentucky.

Last year, the company committed to invest $1.4 billion in its Cambridge and Woodstock plants in Ontario. The federal government and Ontario government each committed $110 million to support the investment.

We knew some sort of product announcement was scheduled to take place today after the automaker’s Canadian arm stopped and shook everyone in sight last week, eager to signal its committed to maintaining a presence in the snowy country north of Buffalo. The Lexus NX is that product, Toyota says, with Canadian production replacing Japanese output.

“Toyota’s operations in Canada are here to stay,” said Fred Volf, president of Toyota Motor Manufacturing Canada Inc., flanked by Prime Minister Justin Trudeau at the plant located about 100 kilometres (62 miles) west of Toronto.

“These recent investments allow us to change swiftly and smoothly,” he said. “It means that TMMC will continue to be a leader in automotive manufacturing in Canada and globally, and it means TMMC will build the most technologically advanced, most in-demand cars in the Toyota-Lexus global climate.”

It is good news for Canadas auto industry, especially in Ontario, after Fiat Chrysler Automobiles said in March it would cut a shift at its Windsor assembly plant, leading to 1,500 job losses, and General Motors said last year it would shut its Oshawa factory by the end of 2019.

A major automotive announcement came out of Toyota Motor Manufacturing Canada in Cambridge on Monday. 

Last week, Bloomberg reported the plant would also produce a three-row version of the RX, which is also produced in Cambridge. However, Volf said Monday that report was inaccurate.

Perry Lefko Justin Trudeau has struck a relationship with Toyota officials, the prime minister said.

Toyota to build additional Lexus SUVs at Cambridge plant beginning in 2022

“This company understands what Canada brings to the table as we compete in the global market. We have a highly-educated, highly-skilled purpose,” Trudeau said. “Canadian manufacturing quality is second to none.” 

Prime Minister Justin Trudeau will be in Waterloo Region at the Cambridge Toyota Manufacturing Plant.

Trudeau said government funding will always play a role in securing the future of the Canadian auto industry.

“This company understands what Canada brings to the table to compete in a global marketplace. We have a highly educated, highly skilled workforce. Canadian manufacturing is second to none,” said Trudeau, who cited trade deals, including the new North American free trade agreement, as giving the Canadian manufacturing sector strength.

“I think the question that Canadians rightly have about public money invested in any industry is, are we investing in the future of the industry or are we investing in keeping things the way they were?” Trudeau said.

In an announcement Monday, attended by Prime Minister Justin Trudeau, the Southwestern Ontario plant revealed it will begin assembling the Lexus NX, a compact luxury crossover, in 2022. Sales of the Lexus NX top 50,000 across North America, said Fred Volf, president Toyota Motor Manufacturing Canada (TMMC).

“We see that the auto industry is evolving rapidly and thats why … being part of that and making those investments for the future also by investing in research, in science and in education and training for Canadians is how public investments are going to ensure that we continue to have great jobs right across Canada for many years to come.”

Since then, however, Toyota shifted some production of the hybrid RAV4 to Kentucky, but Monday’s announcement softens that blow. The RAV4 hybrid, as well as gas-powered models, are assembled at Woodstock for sale in Canada. The gas version also is assembled at Cambridge.

Trudeau said Toyotas decision amounts to a “significant” vote of confidence at a time when the auto sector is facing many challenges.

That money was initially earmarked to increase production of the Toyota RAV4, but some of that production has moved to Kentucky. Still, a spokesperson said at the time that the Toyotas U.S. investments would not impact Canadian production. It appears he was right.

Flavio Volpe, president of the Automotive Parts Manufacturers Association, said the announcement “would be a counter narrative for the recent bad news from other [automakers] that you cant build profitably in Ontario.”

The creation of the Lexus NX in Cambridge is due in part to last years federal and provincial governments $220 million funding announcement in Toyota, Trudeau says. Its part of Toyotas $1.4 billion upgrade at its Cambridge and Woodstock manufacturing plants.

The new production line will underpin 8,000 existing jobs, a government source told Reuters. No new jobs will be created, one industry source said. 

With the prime minister present for the announcement, it was framed as a major win for Ontarios auto sector. Trudeau took it to the next level, giving nods to the Canadian economy and international business investment since he became prime minister in 2015.

George Augustaitis, director of automotive industry analytics at CarGurus, said the producing the vehicles in Canada provides “pricing stability caused by changes in currency markets.”

Canadian car and truck production dropped to less than two million units in 2018 – a level it first topped in 1993 – as the countrys share of North American output fell to 12 per cent, according to a recent report from DesRosiers Automotive Consultants. Production hit almost three million cars and trucks in 1999 and, except for a drop during the financial crisis of 2009, remained above two-million mark until last year.

He also said the 2022 target date for the Lexus NX “also aligns with when Lexus might refresh the vehicle as the NX was launched as a 2015 model year.” 

We feel we can manufacture successfully and competitively in Canada and have done always that and we intend to continue doing that, Mr. MacKenzie said. When we started making Lexus RX back in 2003 … we were the first and at the time only plants outside of Japan chosen to make Lexus. … A lot of that is based on trust.

The Canadian Press, Reuters, Bloomberg and Automotive News Canada contributed to this report.

General Motors Co. will close its Oshawa car plant in December, putting about 3,000 people out of work as it pulls the Chevrolet Impala and Cadillac XTS from its lineup. Fiat Chrysler Automobiles NV said it will cut a shift at its Windsor, Ont., factory starting Sept. 30, a move that will eliminate 1,500 jobs.

FBNs Jeff Flock interviews Toyota America EVP Bob Carter and Hyundai North America COO Brian Smith about auto tariffs at the New York International Auto Show.


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