Toyota to centralize Lexus production in U.S., Nikkei reports

On the Dash:

• Toyota is planning to streamline Lexus production in the U.S., reducing operations from two plants to one. 
• Production of the Lexus EF sedan in Kentucky will stop, with some high-end models shifting to Japan. 
• High U.S. tariffs drive the move, aiming to strengthen domestic hybrid vehicle manufacturing.

According to Nikkei Asia, a Japan-based English-language news outlet, Toyota Motor is consolidating its U.S. production for Lexus luxury vehicles. This move will involve ending operations at its Kentucky plant, which currently produces ES sedans, and shifting some high-end Lexus production to Japan.

Currently, Lexus manufactures the ES sedans in Kentucky and produces the TX SUVs in Indiana. Under the new plan, the automaker plans to halt production of Lexus sedans in Kentucky, which will reduce all U.S. operations to a single site. Toyota aims to optimize manufacturing efficiency while addressing the high tariffs imposed by the Trump administration.

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This centralization is part of the automaker’s broader strategy to balance international and domestic production, maintain competitiveness in the luxury vehicle market, and emphasize hybrid technology. The change may impact local jobs and supplier networks, highlighting the ongoing influence of trade policies on the automotive industry.

By focusing its U.S. operations, Toyota seeks to reduce costs and streamline production in response to shifting market demands while continuing to supply both traditional and hybrid luxury vehicles to the North American market.