Toyota Motor Corp, Japan’s largest carmaker plans to produce Yaris subcompacts at a French plant for export to North America next year.
Toyota Motor Manufacturing France said Friday will start building about 25,000 of the Yaris model per year for exports to the U.S., Canada and Puerto Rico from May 2013.
The decision marks the first time Toyota vehicles assembled in Europe will be exported to North America.
That number would make up a sizeable chunk of the cars sold here. Toyota sold a combined 37,489 Yaris hatchbacks in the U.S. and Canada last year, so more than half of the 2013 and 2014 models will come from France when the production and export operation is fully up to speed.
Analysts said the move, announced by Toyota late on Friday, is aimed at keeping a strong yen and soaring energy costs from affecting its earnings. Other Japanese automakers have also shifted some export production out of Japan.
A strong yen the value of overseas earnings for Japanese automakers, making it harder to offer products at cheaper prices abroad. The dollar has traded at 79-yen levels recently, down from about 100 yen in 2009.
Toyota was on a steady growth path through 2007, but stumbled with the financial crisis and its massive global recalls three years ago. The earthquake and tsunami in northeastern Japan last year followed by flooding in Thailand, which disrupted supplies, added to its woes.
The company will cut Japan production from an estimated 3.4 million units this year to 3.1 million units as early as 2014, with an eventual goal of 3 million