• Aug 19th 2010 at 9:02AM
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2010 Toyota Yaris – Click above for high-res image gallery

Either the strength of the dollar has hit a new low or the Japanese yen has reached an unpredicted high. Regardless of how you look at it, the yen-to-dollar exchange rate has forced Toyota to reconsider exporting its fuel efficient, bargain-priced Yaris subcompact and Corolla compact to the U.S. with claims that the process would be unprofitable.

Luckily, Toyota has restarted construction at it Tupelo-area plant, with reports suggesting that the company will build the perennially hot-selling Corolla there starting late next year, but that still leaves us wondering about Toyota's immediate plans for both vehicles. Atsushi Niimi, Toyota's executive vice president for global manufacturing, told reporters that the company is looking into the feasibility of profitably building the Yaris in the U.S. Niimi said:
Given the current exchange-rate situation, it isn't feasible, in terms of a business model, for us to produce Corolla or Yaris in Japan and export them. We're working very hard to reduce costs to maintain the appeal of these cars.
So, it looks like Toyota is faced with a problem that has several possible solutions. The company could retool a U.S.-based plant to produce both models, it could increase the MSRP of its budget-priced vehicles, or just take a hit on each Yaris and Corolla sold, while making up for the loss with higher-priced offerings. Which path would you choose?

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    • 1 Second Ago
      • 5 Years Ago
      It's a wash, Unless Toyota is paying more to Build the Yaris then it doesn't add up..Just cause the dollar value went up in value doesn't justify a pull out of a market when it is costing the company the same amount to build it..Unless they have a portfolio account and are making bigger returns in the money market exchange...
      • 5 Years Ago
      It can't be cheap to even reopen the Toyota plant in Fremont where Corollas were made before. It seems ominous for the American economy that very well informed corporations with a history of making good decisions is betting against the dollar in the long term.
      • 5 Years Ago
      I'm not sure the question posed is even valid. This is mainly dialog for government incentives.

      The Yaris can easily be built in Mexico or anywhere in North America that builds at the lowest cost. The mention of Japan is ridiculous. The Yaris is going to be built somewhere around here no matter what.

      The Corolla is a dying American car. Toyota will not spend a cent to build an extra facility unless subsidized by the government. Subsidies will simply slow the death of the car.
        • 5 Years Ago
        In addition to being the best selling model name of all time globally, the Corolla is the 6th best selling car in America. That means it sells better than every car (not truck) from GM, Ford, and Chrysler.


        Toyota also makes the Corolla at the TMMC plant in Canada. I would assume that plant will ramp up production untill the new US plant becomes fully operational.

        • 5 Years Ago
        The Yaris could be built in the USA, however, no B segment vehicle currently for sale in the USA, is built in the USA. The reason is obvious, low profit margins. Mexico would seem to be the place for the Yaris and the Scion xD if they want to keep selling them here. The Corolla wil be sold in the USA, you don't walk away from that much volume, or name recognition.
        • 5 Years Ago
        I'm not sure about "dying American car". It's not American and it's not dying. They're on pace to sell a quarter of a million of them in the US this year.

        The weak dollar is a good thing for Ford and Chevrolet.
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