Toyota Invests $400M in U.S., Moves Hybrid Production

Toyota recently announced plans to shift production of its Highlander crossover hybrid from Japan to Princeton, Indiana. This project will involve a capital investment of about $400 million to expand and remodel Toyota’s current Indiana plant while adding 400 additional jobs to the Princeton facility.

Toyota Motor Manufacturing Indiana, Inc. was established in 1995 to build the Toyota Tundra, and a number of other models have also been produced at the plant. The Highlander has been built at the Princeton facility since 2009, though the hybrid version was still assembled in Kyushu, Japan. Highlander hybrids built at the Princeton manufacturing plant will be sold in the United States and also exported to a number of world markets.

The move is in line with other changes to Toyota manufacturing that have resulted in more U.S. jobs being created due to a strong Yen. The strong Japanese currency and weak U.S. dollar means exporting from Japan is becoming very expensive and thus is driving a resurgence in U.S. manufacturing.

In addition to the Highlander and hybrid Highlander, the Indiana facility continues to produce the Sienna minivan and Sequoia SUV. The facility employs about 4,500 people, which is expected to rise to 4,900 after the plant is upgraded.

Adding the hybrid model to the production line is expected to greatly increase the output of the Princeton manufacturing plant as well. The facility assembled over 100,000 Highlanders in 2011, and it is expected to produce about 50,000 hybrid vehicles each year by the end of 2013.

Yoshimi Inaba gave a speech to the Economic Club of Chicago to announce the project. He said that hybrid Highlanders accounted for about 5,000 sales in the United States during 2011, but he expects that number to increase steadily. Due to new hybrid technology, and rising gas prices, Inaba suggests that yearly worldwide sales of the hybrid Highlander will approach 50,000 units in the near future.

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