Toyota Industries Corp. on Thursday said it has decided to establish a new subsidiary in the United States to produce compressor parts for automobile air conditioners.
The company will invest 28 billion yen (363mln dollars) in the subsidiary to produce fuel-efficient compressors in the United States instead of their exports from Japan to cope with the strong yen.
Toyota Motor Corp. President Akio Toyoda said it “doesn’t make sense” at the current yen rate to export compact cars.
“So that is why we might take various steps such as shifting [production] overseas, using different suppliers and increasing local procurement” levels, he said in an interview.
Toyota made headlines last year by announcing the start of Camry exports from the United States to South Korea, instead of shipping them from neighboring Japan.
“We are looking for the opportunity for any North American product to be exported,” Yoshimi Inaba, president and chief operating officer of Toyota Motor North America, told a small group of reporters at the Detroit auto show last week.
Exporters such as Toyota Motor Corp and Sony Corp declined as the yen rose against major currencies, hovering around the lower 77-yen range to the dollar. A strong yen makes Japanese goods more expensive abroad and erodes repatriated earnings.
Toyota fell 1.7 per cent, and Sony was down 1.39 per cent.