Starting next May Toyota will build its Yaris models destined for the US, Canada and Puerto Rico in France rather than Japan.
The Yaris model is already built at Toyota Motor Manufacturing France (TMMF) near Valenciennes but models exported to North America are currently made at the Toyota Industries Corporation (TICO) factory in Aichi province, Japan.
From next year, all Japanese production will move to Valenciennes and the company is making an €8m ($10m) investment to accommodate the increase in output at the French plant. That increase is equal to between 10-15% of annual output depending on overall production levels at TMMF and export demand.
The Japanese plant will increase production volumes of other models according to Toyota so that total production volumes will remain around the same level, though it didn't specify which models those would be.
Toyota expects to export around 25,000 units from France to North America. A spokesman for the company told Automotive Logistics News that last year sales of the Yaris in North America were around 32,000 for the US, 6,500 for Canada and 6,800 for Puerto Rico.
He added that some models, such as the sport version or sedans for some markets, will continue to come from Japan, as well as some vehicles with destinations in the Pacific (such as Hawaii).
These figures include sedans that are not sold in Europe.
The company said it was still working on establishing logistics routes to support the shift in production and could not confirm any further details. However, a spokesperson added that after 10 years in business TMMF had diversified and "matured to take on board the management of a more complex production that will include three different motorisations (diesel, petrol and hybrid) and now also the export to North America".
The hybrid version of the vehicle built at Valenciennes will not be exported to North America or Puerto Rico.
While Toyota said the shift to Europe was part of the company's aim "to create a production structure that makes most sense from a global point of view", the strength of the yen is thought to be a strong influence on its decision, which is making exports from Japan less cost-competitive and affecting profits. It follows similar moves made by other Japanese carmakers, including Honda, to move production away from Japan in an effort to limit the effect of the strong yen on exports.
Honda has already stated it plans to reduce export from Japan to between 10-20% and sell between 80-90% of vehicles from local production in its various markets around the world.
Likewise, Nissan Motor said last year that it was cutting exports from Japan by a third in a new strategy designed to boost domestic sales and reduce the impact of the strong yen, which is hitting the company's profits. It also said this week that it plans to cut vehicle production capacity in Japan by 15% from July and move assembly of the Note, Tiida and Latio small cars to Thailand. The move is in response to rising manufacturing costs and weakening domestic demand.
In other news, Toyota is reported to be planning to provide BMW with more hybrid engine and fuel cell technology, building on an agreement the carmakers signed last December for the development of diesel engines and electric car batteries. As BMW's chairman Norbert Reithofer outlined at the carmaker's AGM last month, Toyota is already working with BMW and supplying it with lithium-ion cell technology in exchange for BMW's diesel technology. Toyota Europe plans to buy four-cylinder diesel engines from the German carmaker.