Toyota Motor Corp. said Thursday it will start producing its Prius hybrid model in Thailand from next month, in its latest move to expand production overseas as the strong yen continues to bite into profits.
The plan to begin making the Prius at a plant near Bangkok marks the first time Toyota's flagship model will be mass-produced outside of Japan, where the company produced around 400,000 of the cars last year.
The automaker is attempting to shift more of its output to other countries, as the strong yen makes cars exported from Japan less competitive in overseas markets and domestic sales taper off following the expiry of government purchasing subsidies last month. Toyota's overseas production ratio is set to hit a record high of 57% for this fiscal year.
The plan is also part of the company's efforts to reach its goal of 1 million hybrid sales per year sometime this decade. Toyota aims to sell at least 700,000 hybrids globally this year.
Toyota executive vice president Atsushi Niimi has said that the company hopes to produce the Prius in the U.S. in the future, although the automaker recently decided to produce the Corolla at a new plant in Mississippi instead of the Prius as initially planned.
A Toyota spokesman said the company hasn't yet finalized output levels at the Thai plant, and will disclose further details, such as the investment amount, at a press conference to be held on November 16th. The company said its decision comes amid growing consumer interest in environmental technology and energy conservation in the country.
The spokesman added that Toyota makes a small number of Prius models in China at present, but does not mass-produce the car there and only assembles the vehicles using exported components from Japan.
Japan's auto makers are under pressure to find new ways to deal with the impact of a strong yen at near 15-year highs against the dollar.
Earlier this year, Toyota decided to build a second auto assembly plant in Brazil and announced plans to set up new engines and transmission factories in India, as well as a new plant in China.
Mazda Motor Corp. (7261.TO) chief executive Takashi Yamanouchi said separately Thursday that the strength of the yen will strip an extra Y40 billion out of the company's operating profit this fiscal year, which the it aims to offset with solid vehicle sales, cost-cutting and other steps.
Yamanouchi also said that his company's global vehicle sales are likely to top its target of 1.27 million vehicles for this fiscal year through March as solid sales in Asia will likely make up for weak sales in the U.S., Europe and Japan.
Separately, in an unwelcome reminder of its troubles at the start of the year, Toyota announced Thursday a string of recalls in Japan, the U.S., China and other markets totaling 1.5 million vehicles due to possible leakage of brake fluid.
The latest recalls include 740,000 vehicles in the U.S. and about 600,000 vehicles in Japan.
