Toyota Adds New Lexus Crossover Production at Canadian Plant

(Bloomberg) -- Toyota Motor Corp. will build an additional Lexus SUV model in Canada, investing “hundreds of millions of dollars” and potentially boosting employment in the country’s hard-hit auto sector.

The Japanese automaker will produce gasoline and hybrid versions of the Lexus NX crossover beginning in 2022 at the plant in Cambridge, Ontario, Fred Volf, president of Toyota Motor Manufacturing Canada Inc., said Monday. This marks the first time the vehicle will be produced outside Japan. Bloomberg reported the company’s plans last week.

Toyota Canada said last year it would invest C$1.4 billion to build a new flexible production platform. That will be used to build the NX and “there will be some further investment required,” Volf said in an interview at the plant, which is located about 100 kilometers (62 miles) west of Toronto. It’s unclear yet whether new jobs will be added.

“There may be some increase in employment, but that really determines what that next generation of NX has in content and complexity,” Volf said.

Toyota already builds the Lexus RX SUV and Corolla compact sedan at the plant in Cambridge, as well as the best-selling RAV4 crossover at a factory in Woodstock, Ontario. Combined, the two facilities have a production capacity of more than 500,000 vehicles a year, making Toyota the largest auto manufacturer in Canada, according to the Canadian government.

The decision to build the Lexus NX in Canada comes after the automaker had said previously it plans to move production of the Corolla from Ontario to a new plant under construction in Alabama, which it will run jointly with Mazda Motor Corp. The two companies plan to start output at that new factory in 2021.

Monday’s news is a rare bright spot for Ontario’s auto industry, which is facing the end of production at General Motors Co.’s plant in Oshawa after this year and the cutting of a shift at Fiat Chrysler Automobiles NV’s minivan plant in Windsor this fall. Between them, those moves will cost about 4,500 jobs.

“We are staying here in Canada, we’re here for the long term,” Volf said.

Passenger-vehicle production in Canada is projected to drop 20 percent this year followed by another decline in 2020, Fitch Solutions Macro Research said in December.

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