Toyota Motor will close its Kentucky Lexus facility and move sedan production to Japan as the automaker adapts to President Donald Trump’s 25% automotive tariffs, Nikkei reported.
The Japanese manufacturer plans to discontinue Lexus ES sedan production in Georgetown, Kentucky, after fulfilling current orders. The next-generation model will be exported from Japan starting next year. Meanwhile, Toyota will consolidate all US Lexus operations at its Indiana plant, which currently produces the TX full-size SUV.
The restructuring reflects broader industry turmoil following Trump’s March tariff implementation. Toyota has warned of a $9.5 billion profit hit from the trade measures, prompting strategic shifts across its North American footprint.
The consolidation strategy appears designed to optimize production costs while navigating the tariff landscape. Toyota will maintain two other Lexus models at its Canadian facility, though vehicles from Canada face 25% tariffs under current policy, compared to the 15% rate negotiated for Japanese imports in July.
“We select appropriate production sites in accordance with price ranges,” Toyota’s US subsidiary stated, suggesting the company is prioritizing higher-margin luxury vehicles for Japanese production while keeping mass-market models domestic.
The move underscores how trade policy is forcing automakers to reconsider decades-old manufacturing strategies, potentially reversing globalization trends that defined the industry.
