Kentucky Seen Likely Site for Toyota Plant

Toyota is expected to announce next week that it will build its own U.S. auto assembly plant near the small college town of Georgetown, Ky., to produce 200,000 cars a year beginning in 1988, industry and government sources said Tuesday.

But the sources cautioned that Toyota and Kentucky officials are still holding last-minute negotiations over the site selection and that some issues--apparently concerning what the state will do for the company--have not been resolved.

Toyota has not yet ruled out Tennessee as an alternative location and won’t make a final decision on a site until Sunday, sources indicated. Toyota is expected to announce its choice in a press conference on Dec. 11.

Kentucky officials said Tuesday that they could not confirm reports that Toyota had already selected the Georgetown site, and Toyota spokesmen refused to comment.

But officials at Norfolk Southern Corp., which provides rail service to the area, said Tuesday that the railroad is in the process of purchasing options to buy 1,500 acres of farmland outside Georgetown on behalf of the state’s economic development agency, which is apparently packaging the land for Toyota.

City officials in Georgetown, a town of about 10,000 in central Kentucky some 13 miles from Lexington, also said Tuesday that Toyota officials have been visiting the town recently and have even flown over the area in helicopters to survey the proposed site.

Georgetown, home of Georgetown College, a small Baptist school, is in the heart of Kentucky’s picturesque bluegrass region and is known as the site where bourbon whiskey was first distilled.

Toyota is the last of the major Japanese auto makers to decide to build its own assembly plant in the United States.

It manages the GM-Toyota joint venture plant in Fremont that opened last year, but so far all of the small cars produced there have been sold by GM.

Perhaps the most conservative of the Japanese auto makers, Toyota has traditionally been reluctant to move any of its production facilities out of Japan, where it has centralized and efficient manufacturing operations.

But, with the extension of auto export restraints by the Japanese government, Toyota’s traditional hold on the top spot among Japanese nameplates in the United States has been threatened by Honda, which has been supplementing its imports by selling U.S.-built cars since 1982.

Top Spot Threatened

Faced with growing competition from Honda and Nissan, which has just begun U.S. car production in Tennessee, officials at Toyota’s American sales arm have repeatedly warned the firm’s top executives in Japan that Toyota could permanently lose its leadership position in the American market without a domestic plant.

Now, Toyota has finally decided to move aggressively into North American production.

It plans to sell 50,000 of the 240,000 cars built each year at Fremont through its own dealerships beginning in 1986 and will also build a small assembly plant in Canada to produce an additional 50,000 cars annually for the Canadian market.

The new U.S. assembly plant, meanwhile, which is expected to cost about $625 million to build, will produce about 200,000 compact cars based on the Toyota Camry model.