UPDATE 1-Toyota readies U.S. production of Lexus ES by 2015

April 19 Fri Apr 19, 2013 10:29am EDT

April 19 (Reuters) - Toyota Motor Corp plans to make the Lexus ES 350 sedan at its Kentucky plant in 2015, marking the first time that the Japanese automaker has built a vehicle from its luxury lineup in the United States.

Toyota announced on Friday that it will invest $360 million at the Georgetown factory, which assembles the Toyota Camry and other models. The move will generate 750 new jobs.

About 50,000 sedans will be produced each year, bringing the plant's total production capacity to more than 550,000 vehicles.

"It is fitting the first country to build the ES outside of Japan is the United States, because this is home for Lexus -- it is where the brand was founded and it is still the biggest market for the luxury brand," Akio Toyoda, the president of Toyota, said during a news conference in New York.

Expanding U.S. production fits in with Toyota's strategy to make cars in the markets where its customers live. The ES sedan was the second most popular Lexus model in the United States last year after the RX sport utility vehicle.

The ES represented 9.2 percent of sales in the U.S. market for entry-level luxury cars in 2012, according to data from Kelley Blue Book.

The move also counters the effect of the strong yen, which has made exporting from Japan expensive. Converting overseas profits back into the yen has pinched profits. The yen's decline since last year has not changed that strategy.

"This decision is in line with two key goals," Toyoda said. "First, to serve our U.S. customers. And second, reduce the effect of the exchange rate on our customers."

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