Toyota Stock (TM) Motors Higher as it Eyes U.K. Production Shift to Beat Tariffs

Japanese automaker Toyota (TM) is considering increasing its production in the U.K. in a move that could escape the worst of President Trump’s tariffs. Its shares rose 1%.

U.S. Export

According to a Reuters report, Toyota could move the manufacturing of its sporty GR Corolla range from Japan to the U.K. It currently makes the car in Japan to sell both at home and to export to the U.S.

Sources close to Toyota said the plan was built around using excess capacity at an existing Toyota manufacturing plant in Derby in the U.K. and to reduce waiting times for customers keen to get behind the wheel. The plan would be to build 10,000 vehicles per year at the plant, which already makes the base model of the Corolla, for export to North America.

The sources, however, said that the move was not linked to Donald Trump’s tariffs on car imports.

Tariff Advantage

Despite that, shifting production to the U.K. would be an advantage for Toyota in the ongoing tariff trade war. That’s because in the recent U.S. and U.K. trade deal the tariff on vehicles being imported into the U.S. from the U.K. was slashed to 10%, compared with a rate of 25% from Japan and elsewhere.

It has previously been reported that Toyota is considering producing the next version of its popular RAV4 SUV in the U.S. It originally planned to export the new RAV4 to the United States from Canada and Japan, but it is now also considering production in Kentucky given that demand for the car looks likely to outstrip supply.

But lessening the blow of Trump’s tariffs is also part of the thinking behind the possible production shift.

Is TM a Good Stock to Buy Now?

Given the lack of analyst coverage of the TM stock let’s take a look at the last 3 months performance. As one can see the stock has been flat over the period.