Toyota mulling moving RAV4 production to Kentucky

Toyota is considering producing the next-gen RAV4 (current-gen 2022 facelift pictured) in the US due to president Trump’s tariffs, after originally planning to export to the US from Canada and Japan, Reuters has reported, citing three people familiar with the matter.

The current RAV4 is made in Kentucky, Canada and Japan. According to JATO Dynamics, last year, over 475,000 RAV4s were sold in the US (a fifth of Toyota’s total sales there), making it the country’s best-selling vehicle and beating even the Ford F-150, which has been at the top since time immemorial.

If the Kentucky plan is a go, the next-gen RAV4 would probably start production there in 2027 after being unveiled this year, Reuters reported. Manufacturing in the US would lessen the 25% import car tariff‘s impact and avoid potentially higher costs as a result of the yen’s volatility.

The sources also said that Toyota’s production plans are not yet finalised, and that any production changes require long-term planning; they cannot be implemented quickly because retooling and adjusting supply chains take a lot of time and money.

Toyota, which has invested nearly US$50 billion (RM219 billion) in the US over the years, runs 11 plants there including parts plants, and manufactured almost 1.3 million vehicles (over half of its US sales) in the country last year.

To put it lightly, Trump’s tariffs have shaken the global automotive industry. The Volvo Group may cut up to 800 jobs, Ford has paused shipping to China, Honda will move Civic Hybrid hatchback production from Japan to the US, and Tesla Semi truck and Cybercab/Robotaxi production could be delayed.

Nissan plans to cut Japanese production of the Rogue (which we call the X-Trail), its US best-seller, by 13,000 units over May-July, Stellantis has paused Canadian and Mexican production, while Mitsubishi, JLR, Lotus, Volkswagen and Audi have all halted US shipments. Malaysia? We can expect the Chinese wave to get even bigger.

Curious about the sixth-gen Toyota RAV4? The upcoming SUV was apparently leaked earlier this year on Weibo – ‘Hammerhead’ face, body-coloured honeycomb grille, edgy styling, and possibly plug-in hybrid (PHEV) and even battery-electric (EV) versions. Get the full lowdown here.

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