Toyota Hasn’t Decided to End Camry Assembly at U.S. Subaru Plant

Toyota Motor Corp. (7203)’s top North American executive said the carmaker hasn’t decided to end a production deal that supplies it with 100,000 Camry sedans annually from Fuji Heavy Industries Ltd.’s U.S. Subaru plant.

The contract-assembly arrangement at Subaru’s Lafayette, Indiana, plant between the carmakers could end after 2016, Tom Easterday, the factory’s executive vice president told television station WLFI and the Journal and Courier newspaper Nov. 13. The plant has made Camrys since 2007 for Toyota, which owns 16.6 percent of Fuji Heavy, and has the option to continue, said Jim Lentz, head of Toyota’s North American operations.

“I’ve been involved in the discussions going on within Toyota, and then with Toyota and Subaru, and it has not been decided,” he said in an interview at the Los Angeles Auto Show yesterday. “There’s still within the contract a certain period of time within which we have to renew. I think that window of time is just opening.”

Any production change for Camry, the top-selling U.S. car for more than a decade, is taken with great care as the Toyota City, Japan-based company seeks to sustain the model’s leadership. Camry led Honda Motor Co. (7267)’s Accord, its closest challenger, by more than 40,000 sales through October and Ford Motor Co. (F)’s new Fusion sedan by 100,000.

Ford Challenge

Ford is boosting Fusion production by building it at a second plant as the Dearborn, Michigan-based company works to pare Camry’s lead in 2014.

It’s hard to see Toyota cutting its output, when there’s so much demand for the model from loyal, repeat buyers, said Jessica Caldwell, an analyst at Edmunds.com in Santa Monica, California.

“Losing capacity on that vehicle hadn’t been the direction they were going at all,” she said.

Toyota should sell about 415,000 Camrys this year, Bob Carter, Toyota’s U.S. senior vice president, said in a separate interview in Los Angeles. Going forward, the goal is to maintain Camry sales in the U.S. at the 400,000-unit level, he said.

Were Toyota to stop getting Camrys from the Subaru plant, it’s unlikely that volume would shift to its Georgetown, Kentucky, factory, the main builder of the model, Lentz said.

“There’s some period of time for both sides to evaluate what we do with production at that facility,” Lentz said. “There are a lot of different alternatives for us to look at,” he said, without elaborating.

Toyota’s U.S. sales unit is based Torrance, California. The company’s American depositary receipts fell 0.2 percent to $126.05 yesterday in New York. They’ve risen 35 percent this year.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.