Toyota says it will produce its Yaris sub-compact cars for export to North America at a French plant, beginning next year.
For the first time, about 25,000 Yaris hatchbacks a year will be exported to the U.S. and Canada from France, starting in May 2013.
Currently, all Yaris models sold in North America are built in Japan. Toyota sold more than 37,000 Yaris hatchbacks in the U.S. and Canada last year, which means that more than half their future North American-market cars will come from France.
The move seems to be an attempt to offset profit pressures resulting from a strong yen and high energy costs in Japan. The yen is now trading below 80 yen to the American dollar. The exchange rate was about 100 per dollar three years ago.
Several Japanese automakers have shifted production from Japan to local markets, although exporting from Europe to North America takes that practice a step further .
Toyota plans to reduce Japanese production from about 3.4 million units currently to 3.1 million units by 2014, and ultimately to 3.0 million.