TOKYO -- Toyota Motor Corp. plans to halt exports of its Japan-made Camry sedan to North America following the launch of the redesigned version this fall.
The phase out of imported Camrys, which currently account for just a sliver of U.S. sales, comes as the company races to boost local production to offset exchange rate losses.
"The current U.S. production capacity is sufficient to produce the vehicles we plan to sell," says Yukihiro Okane, chief engineer for the seventh generation Camry, which went on sale in Japan on Sept. 5 and hits U.S. showrooms later this month. "North America will be self sufficient," he said.
Toyota is targeting annual U.S. sales of 360,000 Camrys, and the car will be manufactured at Toyota's factory in Georgetown, Ky., as well as Subaru's factory in Indiana.
Toyota's Tsutsumi plant in Toyota City, Japan, will also continue making the car. But output is seen around 30,000 units a year, with only 6,000 going to the domestic Japanese market.
None of those vehicles will be U.S.-bound, Okane said. Imported Camrys accounted for just 982, or half-a-percent, of the 203,688 Camrys sold in the United States through August.
While the Camry has been the best selling car in the United States for nine straight years, the sedan is anything but big in Japan. Domestic sales peaked at 82,000 units in 1990 and dwindled to 1,100 units last year. At home, the mid-sized Camry, which gets its name from the Japanese word for crown, languishes between the upscale Crown sedan and sportier Mark X.
The company aims to lift annual Japan sales to 6,000 by offering only the hybrid version here. The goal is to tap Japanese enthusiasm for gasoline-electric drivetrains and offer a car that qualifies for government eco-car incentives, which the gasoline-only version fails to do.
Despite meager sales plans for Japan, Toyota says importing the Camry from bigger overseas production bases, such as Georgetown, was never considered -- regardless of the exchange rate.
Because the car was developed in Japan, Toyota sees it as important to keep a manufacturing center -- no matter how small -- close to the engineering team that created it, to troubleshoot potential problems and improve the manufacturing process, Okane said.
"This Camry was developed in Japan, which means that production engineering as well as design engineering originated here," Okane said. "So at the moment, it's most effective to manufacture the Camry in Japan, and starting with Tsutsumi to deploy manufacturing globally."
The hybrid factor also plays a role.
While Toyota plans to sell 50,000 hybrid Camrys in the United States, all of those will be made with batteries, electric motors and inverters imported from Japan. It makes little sense to export those components from Japan, only to re-import them in completed vehicles.
And by focusing on the hybrid version in Japan, Toyota is able to squeak out extra volume for local production of hybrid drivetrain components -- a key strategy in bringing down costs.
Globally, the car will be made at nine assembly plants in eight countries.
Toyota is targeting worldwide sales around 850,000 units for the latest generation, Okane said. That would be a big surge over last year's tally of 692,000. But it would still fall short of the Camry's peak sales of 924,000 units in 2007, right before the global financial crisis.
Okane said Toyota won't need to expand global Camry capacity to meet their targets. Any excess demand in one market can be bridged by shipments from other markets.
That opens the door for exports from North America down the road. "There's a possibility," Okane said, though he declined to speculate about when such a shift might be needed.