Toyota plans Lexus SUV investment in Canada

Kae Inoue and Chester Dawson
The 2019 Lexus NX

Toyota Motor Corp. plans to begin building two more Lexus SUVs in Canada, according to people familiar with the matter, a major win for the nation’s otherwise-struggling auto sector.

The Japanese automaker will produce the Lexus NX crossover and three-row version of its luxury brand’s top-selling RX sport utility vehicle in Cambridge, Ontario, starting in 2022, according to one of the people. They asked not to be identified ahead of an official announcement the company has said it’s making at the plant on April 29 that will “further re-affirm” its commitment to manufacturing in Canada.

A Toyota Canada spokesman declined to comment.

The 2019 Lexus RX 350

Toyota is delivering a much-needed boost to Ontario after the blows General Motors Co. and Fiat Chrysler Automobiles NV have dealt to plants in the country since late last year. GM has said it has no future product planned beyond this year for its Chevrolet Impala and Cadillac XTS sedan factory in Oshawa that employed almost 3,000. Fiat Chrysler has said it plans to cut a production shift and about 1,500 workers at its minivan plant in Windsor this fall.

Passenger-vehicle production in Canada is projected to drop by 20 percent this year as GM winds down operations in Oshawa, Fitch Solutions Macro Research said in December. Production in Oshawa fell to about 148,000 vehicles in 2017 from a peak of 940,000 in 2003, a drop of about 85 percent, according to Dennis DesRosiers of DesRosiers Automotive Consultants Inc.

Hybrid shuffle

The 2020 Toyota RAV4.

A year ago, Toyota announced it would invest C$1.4 billion ($1.1 billion) to build gasoline and hybrid versions of the RAV4 crossover at its plant in Cambridge, about 100 kilometers (62 miles) west of Toronto. It’s pivoted from that plan somewhat, deciding to instead build the gas-electric RAV4s in Georgetown, Kentucky.

That shift is opening up room in Cambridge for Toyota to build SUVs that, to this point, have only been built in Japan, the people familiar with the company’s plans said. The Ontario factory was built in 1988 and employs more than 8,000, according to the company’s website.

The RAV4 ascended to the top of Toyota’s U.S. sales chart in 2017. The crossover extended its edge over the company’s No. 2 model, the Camry sedan, last year to almost 84,000 units.

The RX is the longtime leading model in Lexus’s lineup, and the NX became the brand’s second-best seller in the U.S. in 2017.

With assistance from Kristine Owram.