Toyota’s decision to start exports from the US to Russia and the Ukraine this spring – the first US export programme to those markets for the carmaker – marks the start of bigger plans for volume movements between the US and Eastern Europe. It also indicates how important exports to non-NAFTA markets are becoming to carmakers with plants in the North America, in particular Japanese brands.
The company is looking at exporting 5,000 Venza crossover SUVs from its Georgetown facility in Kentucky in the first year, but a spokesperson for Toyota said that Eastern Europe was “an important market for our future export sales”.
“There’s growing market demand for crossover-style vehicles in these countries and Venza gives us an opportunity to fulfill that need,” said the spokesperson.
US-based manufacturers have been increasing exports over the past two years, with Japanese OEMs taking a large share of the growth. Both Toyota and Honda have previously said they were targeting exports of around 200,000 units from the US.
Toyota said the latest shipments were expected to build on its all-time record exports of more than 124,000 US-assembled vehicles in 2012, an increase of 45% over the previous year. Honda saw US exports more than double in 2012 to around 100,000 vehicles, just shy of its own 1994 record.
“Grow th of vehicle output will be increasingly bolstered by non-NAFTA exports through the balance of the decade,” said Michael Robinet, analyst at IHS Automotive. “The combination of several bi-lateral trade agreements, lower relative costs driven by scale and the growth of global platforms into the North American production matrix will serve to raise sourcing linkages with other regions.”
Toyota said that its export strategy had also preceded Russia joining the World Trade Organisation last summer. “Plans to export Venza to Russia and Ukraine were being considered prior to Russia joining the WTO,” said the spokesperson. “However, Venza was launched in the US several years ago and some engineering changes needed to be made to support the unique requirements of the Russian and Ukrainian markets. Now that those changes have been implemented, such as body stiffening and suspension, we are ready to export Venza to these markets.”
Toyota Venza has undergone some engineering changes, including a stiffening of the bosy and suspension, prior to the start of its export to Russia and Ukraine
The company was unwilling to comment on Russia’s imposition of a recycling tariff on foreign vehicle imports.
The Russian Federation became a member of the WTO last August and import tariffs on vehicles were dropped immediately from 30% to 25%, with a further reduction to 15% scheduled on full compliance by 2018. However, at the time the Russian government announced it would be introducing a new vehicle recycling tax, which carmakers importing to Russia have to pay up-front and which is equivalent to 5% of the sale price of the vehicle, effectively cancelling the 5% tariff reduction.
Toyota will export the Venza from the southern US port of Brunswick in Georgia, specifically the Colonel’s Island Terminal. It is the first time the carmaker has used the port and it anticipates an expansion in exports from there.
“Brunswick’s Colonel’s Island Terminal is an addition to our export network,” said Toyota’s spokesperson. “We selected [it] for its location, services from two Class 1 railroads, its focus on handling automobile traffic, experienced vehicle processors and its workforce. Brunswick will be considered for future export expansion.”
Toyota will be working with terminal operator International Auto Processing at the port for the export of the vehicles.
The terminal handled around 612,500 vehicle and machinery units in 2012, a record number and up from the 498,000 handled in the previous year, ranking it third in the US in terms of vehicle handling.
The exports will be carried by “K” Line and will land first in the port of Zeebrugge in Belgium before transhipment east.