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Toyota to Build Minivan in Kentucky, Says Trade Sanctions Would Hurt U.S.

May 9, 1995

DETROIT (AP) _ Toyota has confirmed reports that it will build a new minivan model at its plant in Kentucky starting in 1997.

Meanwhile, Toyota executives told reporters in Detroit on Monday that trade sanctions against Japan in the dispute over U.S. access to Japanese automotive markets would hurt U.S. businesses and workers.

``This is payoff time,″ said James Olson, group vice president of Toyota Motor Sales USA. ``Bill Clinton is doing something for the Big Three and the UAW (United Auto Workers union).″

But Olson said sanctions could backfire, that action to restrict imports of Japanese cars or parts would hurt U.S. car dealers, U.S. suppliers to the Japanese automakers and the thousands of American workers they employ.

Trade negotiations between the countries broke down Friday. The Clinton administration is demanding that Japan’s auto industry buy more American parts and relax informal controls that make it difficult for U.S. automakers to sell cars in Japan. The automotive sector is the largest contributor to the U.S. trade deficit with Japan.

Toshimi Onishi, the Toyota Motor Corp. executive vice president who announced the plans for the new minivan at the Detroit session, said the Japanese government is right in resisting U.S. pressure to meddle in what he called Japan’s open market.

``In fact, Japanese purchasing from American suppliers is growing and it will continue to grow if our governments give it the chance to do so in line with free-market principles,″ Onishi said.

He said Toyota parts purchases outside Japan would total $9.7 billion by 1996, and its North American vehicle plants might produce 900,000 cars and trucks a year by 1998.

Onishi said the new van would share design features and parts with the Camry sedan, which is one of the best-selling cars in the United States.

Toyota officials would not say how many of the new minivans they plan to produce, but the vehicle is expected to give the company a stronger presence in the North American minivan market, which totals more than 1 million vehicles a year and is dominated by Chrysler Corp. and Ford Motor Co.

Toyota now sells small numbers _ about 18,000 last year _ of an imported minivan, the Previa, which it will continue to produce.

The company does not plan to expand its Georgetown, Ky., plant to build the new van, but it may increase its output to up to 450,000 vehicles a year. It built about 285,000 Camry and Avalon models last year.

Toyota also broke ground Monday for a new plant in Cambridge, Ontario. The plant will open in 1997 and build compact Corolla models. It will be Toyota’s second plant in the Canadian city.

Toyota also builds cars and trucks in Fremont, Calif., at New United Motor Manufacturing Inc., a joint venture plant with General Motors Corp.

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