Strong overseas vehicle sales may force Toyota to increase overseas production, a Reuters report said.
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“We have reached our upper limit in overseas production,” Toyota president Fujio Cho told Reuters at the launch of two new commercial vehicles, adding that assembly lines in North America and Europe were running at full capacity.
Exports from Japan – assisted by a weak yen until recently – have increased, Reuters added.
“In the long term, if sales continue to rise, we will have to look at boosting the proportion of overseas production,” Cho told Reuters.
But he added that this did not necessarily mean Toyota was looking to make a major new investment, noting it had just increased capacity at its plant in Brazil and was upgrading its plant in South Africa.
“There’s no need to hurry with a decision. We want to consider it for another two, three, four months,” Cho told Reuters.
Any such move was dependent on Toyota’s overseas sales maintaining their strength but Cho told Reuters he getting a little concerned about the performance of the US economy.
The US vehicle market, where Toyota earns the vast majority of its profits, had performed much better than the industry expected after the September 11 attacks, but Cho said recent signs such as the slide in US shares were worrying.
“The outlook has become unclear and it’s all feeling a bit uncomfortable,” he told Reuters though he added that while the situation needed watching, it was not so bad that Toyota needed to change current plans yet.
Cho also said he was worried about the gains the yen was making against the dollar – about 10% since April – but did not think the recent pace would last, according to Reuters.
