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Toyota Said to Build Compact Hybrid at New Japan Plant

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Akio Toyoda, president and CEO of Toyota Motor Corp.
Akio Toyoda, president and chief executive officer of Toyota Motor Corp. Photographer: Jeff Kowalsky/Bloomberg

Feb. 8 (Bloomberg) -- Toyota Motor Corp. will build a new compact hybrid model at a plant in northern Japan as it reorganizes domestic production, a person familiar with the company’s plans said.

Central Motor Co., an assembly unit of Toyota, will produce the model at a plant in Ohira, Miyagi prefecture, according to the person, who declined to be identified as the plans are private. The carmaker showed a compact version of the Prius hybrid at the Detroit auto show last month.

The automaker, based in Toyota City, is shifting production from its main manufacturing area as the strong yen hurts earnings from exports. Lower labor costs relative to Aichi prefecture, Toyota’s primary domestic production hub, and a nearby port may make Miyagi, about 370 kilometers (230 miles) north of Tokyo, more attractive for exports.

Toyota spokesman Keisuke Kirimoto declined to comment on whether the company will build hybrids in Miyagi.

The automaker plans to begin selling a “city-centric” compact version of the Prius hybrid in the U.S. in the first half of next year. The car was first shown as the Prius c concept model at the Detroit show.

President Akio Toyoda has said the company will protect jobs by maintaining domestic production of about 3 million cars. Toyota built 3.2 million cars in Japan last fiscal year out of 7.3 million units worldwide.

Small-Car Hub

Miyagi will be a hub for Toyota’s small car production. While cars may eventually be shipped out of the Port of Sendai, which is 28 kilometers from the Ohira plant, they will be exported from the Port of Nagoya in Aichi until production reaches sufficient volume, the person familiar with Toyota’s plans said.

Key suppliers have also built new factories in Miyagi. Toyota Boshoku Corp. began production of seats and other interior parts near Central Motor’s Ohira plant last month. Primearth EV Energy Co., a joint venture between Toyota and Panasonic Corp., began producing batteries for hybrid cars at a new plant in Miyagi for hybrid cars in January 2010.

To contact the reporters on this story: Makiko Kitamura in Toyota City via mkitamura1@bloomberg.net; Masatsugu Horie in Toyota City via mhorie3@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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