Toyota’s three Ontario plants made 533,000 cars in 2024 and 82 per cent of these were shipped to the U.S.Petrina Gentile/The Globe and Mail
Unpainted SUVs roll down the assembly line as an autonomous train streams past ferrying bumpers. Nearby, white robotic arms flex and spark, welding body panels while a man in another part of Toyota’s TM-N north plant in Cambridge, Ont., runs gloved hands over car tops in search of burrs and imperfections.
It’s a choreographed, relentless pace that feeds demand for the Toyota RAV4, the top-selling light vehicle in the U.S., and makes Toyota the biggest automaker – by production and employment – in Canada.
But U.S. President Donald Trump’s tariffs have raised questions about the future of Ontario’s auto industry, and the Toyota plants are no exception.
The Japanese automaker’s three Ontario plants made 533,000 cars in 2024 and 82 per cent of these were shipped to the U.S.
Toyota’s U.S. division pays a 25-per-cent tariff on the non-U.S. content of every Canadian-made car it ships south. Other than a recent price increase of US$270 at U.S. dealers, the automaker is absorbing the costs.
“That’s unsustainable in the long term,” says Scott MacKenzie, Toyota’s director of corporate and external affairs for Canada.
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If talks between Ottawa and Washington fail to remove the tariffs, Toyota faces some hard choices, he says – either raising prices in the U.S. or making “adjustments” in Ontario manufacturing. In an interview at the Cambridge plant, Mr. MacKenzie declined to elaborate on what changes are being considered for the Ontario plants.
But a look at the tariff-related production cuts, rolling shutdowns and layoffs at Ontario plants run by Stellantis NV and General Motors Co. underlines the peril faced by all carmakers in Canada.
Mr. MacKenzie is careful to note no decisions have been made, and no changes are planned soon.
Toyota’s U.S. operations in Texas, Tennessee and other states are running at full capacity, like the Ontario plants, and there is nowhere to move production south. That’s a tactic used by GM and Honda to dodge the U.S. duties, and in line with Mr. Trump’s stated goal of putting an end to the Canadian automaking business.
Canada has applied counter-tariffs on U.S.-made automobiles, but exempted automakers that maintain production here. “They want us to keep running,” Mr. MacKenzie says.
Toyota employs 8,500 people in Canada at three assembly plants – two in Cambridge that make RAV4s and the Lexus RX and NX, and a third in nearby Woodstock that also makes the RAV4.
Since the first Canadian plant made its first Corolla in 1988, Toyota has invested billions of dollars in Ontario, producing more than 11 million cars and making the plants the source of half the world’s supply of RAV4s. In 2003, the Cambridge plant became the first Lexus assembly line outside Japan.
Industry consultancy AutoForecast Solutions predicts production at the three plants will rise to 600,000 next year with the switch to the hybrid RAV4.
As the Detroit-based automakers – Ford Motor Co., General Motors Co. and Stellantis NV, known as the D3 – have slashed production in Ontario over the years, their Japanese rivals Toyota and Honda of Canada Manufacturing have held steady.
Annual auto production by the D3 fell to 340,000 from 1.28 million in the past 10 years ending in 2024. Toyota and Honda’s combined production fell by 20,000 cars in the same period. At 950,000 in 2024, Toyota and Honda’s total output comprises 70 per cent of Canadian production and exports.
Sam Fiorani, vice-president of AutoForecast Solutions, says there are a few reasons for the diverging production volumes.
The D3 have primarily used their Ontario plants to supplement production at their U.S. and Mexican plants, and often allocate vehicles there to satisfy the labour union, particularly at the key engine and transmissions plants in Ontario, he says. Meanwhile, plants owned by Stellantis (Brampton) and Ford (Oakville) are between product cycles and idle, while GM’s Oshawa factory has found itself without vehicles to build a handful of times in recent years. GM plants that have faced similar fates include those in Orion, Mich., Kansas City, and Spring Hill, Tenn.
“It’s not just their Canadian outlook, it’s how they work their North American production footprint,” he says.
The Japanese automakers, meanwhile, are busy trying to meet U.S. and Canadian demand for very popular cars, the RAV4 and Honda CRV.
With non-union workforces in Canada and the U.S., the Japanese automakers have more flexibility in decision-making, Mr. Fiorani says by phone.
“They look at this at a plant as steady state production for continuous profit,” Mr. Fiorani says. “As long as they can keep those plants operating at high efficiency, which requires 80 to 90 per cent capacity utilization at all times then they’re happy.”
A key to this productivity is the way Toyota phases in the assembly updated models, says Erin Buchanan, general manager of Toyota’s north plant. The occasional next-generation RAV4 can already be seen on the Cambridge assembly line alongside existing models, ensuring a glitch-free transition without shutting down an assembly line, a common strategy among the D3.
The Toyota plants are closed just two weeks a year, Ms. Buchanan says as she stands on the plant floor near a battery pack station, where workers are placing the rows of cells into an aluminum frame the size of a 24-pack of beer cans. For now, they are just practising, preparing for the coming installation of battery assembly lines in Cambridge and Woodstock. As the plant pivots to make the hybrid versions of the RAV4, the Ontario-made batteries will replace packs shipped from Japan.
Squeezing the assembly lines into a packed plant took several moves, Ms. Buchanan says, likening it to a game of checkers and aided by kamishibai, the Japanese problem-solving visualization technique. The batteries will be added to the cars by robots, making the Ontario plants the first in the world to do so.
Editor’s note: A previous version of this article incorrectly stated that the plant is pivoting to make plug-in and hybrid versions of the RAV4. It will not make plug-in versions of the vehicle.
U.S. President Donald Trump on Monday reiterated that countries that don't make trade deals with the United States will get letters, informing them of the tariffs they will be charged if they export products to the United States.
The Associated Press