Investing in America (1980–1989)
After the successes of the 1970s, and the threats of import restrictions, Toyota started making additional investments in the North American market in the 1980s. In 1981, Japan agreed to voluntary export restraints, which limited the number of vehicles the nation would send to the United States each year, leading Toyota to establish assembly plants in North America. The U.S. government also closed the loophole that allowed Toyota to pay lower taxes by building truck beds in America.[12] Despite those challenges, Toyota also expanded its headquarters in Torrance, California into a larger campus of buildings in 1982, as the company marked 25 years in America.
Efforts to open a Toyota assembly plant in the United States started in 1980, with the company proposing a joint-venture with the Ford Motor Company. Those talks broke down in July 1981.[13] Eventually in 1984, the company struck a deal with General Motors (GM) to establish a joint-venture vehicle manufacturing plant called NUMMI (New United Motor Manufacturing, Inc.) in Fremont, California.[14] GM saw the joint venture as a way to get access to a quality small car and an opportunity to learn about the Toyota Production System and The Toyota Way, a series of lean manufacturing and management philosophies. For Toyota, the factory gave the company its first manufacturing base in North America allowing it to avoid any future tariffs on imported vehicles and saw GM as a partner who could show them how to navigate the American labor environment. The first Toyota assembled in America, a white Corolla, rolled off the line at NUMMI on October 7, 1986.[15] In 1991, Toyota started building pickup trucks at NUMMI, allowing the company to completely avoid the chicken tax.
Toyota took the lessons it learned from NUMMI and went onto establish the wholly owned Toyota Motor Manufacturing USA (later renamed Toyota Motor Manufacturing Kentucky) and Toyota Motor Manufacturing Canada plants in 1986. The Kentucky plant was Toyota's largest manufacturing facility in the world, a title it continues to hold and the Canadian operation would later expand to three separate plants that comprise Toyota's second largest manufacturing facility.
Before the decade was out, Toyota introduced Lexus, a new division that was formed to market and service luxury vehicles in international markets, including North America. Prior to the debut, Toyota's two existing flagship models, the Crown and Century, both catered exclusively for the Japanese market and had little global appeal that could compete with international luxury brands such as Mercedes-Benz, BMW and Jaguar. The company had been developing the brand and vehicles in secret since August 1983, at a cost of over US$1 billion.[16][17] The LS 400 flagship full-size sedan debuted in 1989 to strong sales, and was largely responsible for the successful launch of the Lexus marque.
