Toyota and Honda See North American Production Plow On

2014 Toyota Highlander

As the yen continues to slide against the dollar, Japanese automakers Toyota (NYSE:TM) and Honda (NYSE:HMC) have found that their North American plants have been churning out vehicles at a record pace to keep up with the demand. Toyota built 1.86 million Toyota and Lexus cars and light trucks at its U.S., Canadian, and Mexican plants, while Honda built 1.78 million Honda and Acura vehicles in same regions.

The production numbers, however, were not met by sales in North America, Bloomberg reports. Many vehicles were exported from the North American plants to markets including South Korea and Latin America, the publication said.

“Bigger manufacturers need to know that over a longer cycle they have a stable cost base,” Michael Robinet, managing director at consultant IHS Automotive, told Bloomberg over the phone. “It makes much more sense to stabilize the currency by taking it out of the equation, and building and selling in the same location.”

Toyota and Honda, as well as Nissan (NSANY.PK), have invested large amounts of money into their North American operations, “as insulation against currency swings that can make imports unprofitable,” Bloomberg reports. The strategy will also help the companies take some pressure off their reliance on components from overseas, which further complicates the supply chains.

2014-honda-accord-sedan-side1

Toyota’s Princeton, Indiana, plant saw some expansions made to better handle the production of the Highlanders, a new model of which is hitting showrooms now. Toyota will also commence the production of the Lexus ES sedans in Georgetown, Kentucky, next year. The Camry, America’s best-selling car, is being built both in Georgetown and at the Lafayette, Indiana, Subaru plant under a contract arrangement with Fuji Heavy Industries.

Honda is adding a new facility in Celaya, Mexico, in order to accommodate the production of the new Fit hatchbacks; next year, Honda will start producing the Acura NSX supercars at a new experimental factory in Marysville, Ohio, Bloomberg says.

Toyota built 445,973 Camrys in the States last year, while Honda built 466,695 Accord units, a 17 percent increase over the year prior.

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