Toyota To Start Manufacturing Lexus Vehicles In Kentucky

lexusesToyota’s plant in Georgetown, KY, is slated to go a bit upscale with the news that the world’s largest car company will be using the plant to manufacture the Lexus ES, which had previously only been produced in Japan.

Sources tell Reuters that Kentucky has offered up $146.5 million in tax breaks to urge Toyota to boost production at the Georgetown facility, which currently manufactures the Toyota Camry, Avalon, and Venza vehicles.

The goal, say the sources, is to start producing the ES in the U.S. for 2015, ultimately reaching a level of production that would provide all the ES vehicles needed to fill demand in the U.S. and Canada, though the ES hybrid will still be manufactured in Japan.

Proponents of the expansion say it will result in a long-term investment from Toyota of $531 million over 10 years and will create 750 new jobs.

For Toyota, it may make good sense to produce these vehicles outside of Japan, as the ES is currently not being sold in the car maker’s home country. Manufacturing locally allows Toyota to avoid the costs and hassles of exporting the vehicles.