• Toyota will move from Torrance, Calif. to the Dallas area
  • The automaker is moving to cut costs and be closer to its factories
  • The move could mean more U.S.-built cars and lower prices

Toyota is relocating its U.S. headquarters to Plano, Texas, a midsized suburb north of Dallas. That's the latest from the best-selling Japanese automaker, whose current U.S. headquarters is located in Torrance, Calif., a southwestern suburb of Los Angeles.

According to the automaker, the move will affect around 4,000 employees, half of which are currently in Torrance. Also affected are around 1,000 employees in Erlanger, Ky., and a smaller number of Toyota employees in the New York area. The brand says its Texas headquarters will be completed in late 2016 or early 2017.

For most industry observers, Toyota's announcement comes as a big surprise. That's largely because Toyota has a huge presence in Torrance, which means a move will be difficult and costly. Industry observers are also surprised because nearly all other Asian automakers are located in the Los Angeles area, in part due to easy airport access for global flights. Toyota has been located in the Los Angeles area since its early days in the U.S. market.

But Toyota likely has several good reasons for moving to Texas. One is that the new headquarters will be located nearer to several of the brand's manufacturing facilities, including its 2,000-acre Toyota Motor Manufacturing Texas facility near San Antonio. While that plant currently produces only the Toyota Tacoma and Tundra pickups, the brand's move could signal an intent to expand Texas production and produce more trucks and cars in the Lone Star State over the coming years.

Another reason for Toyota's move east likely has to do with cost. Housing in the Los Angeles area isn't cheap, and neither is office space, meaning Toyota will likely save big money by moving to Texas, where it's less expensive. The automaker also likely received large tax breaks from Texas government agencies to help motivate the decision. For car shoppers, that may mean extra savings as the brand cuts costs.

Interestingly, Toyota's move isn't entirely unprecedented. In 2006, Nissan left the Los Angeles area to move to suburban Nashville, Tenn., largely motivated by the same factors driving Toyota. Only 42 percent of Nissan's employees chose to move with the automaker.

Toyota says it will have only 2,300 employees in California at the conclusion of its move, down from around 5,000 today. But even after moving, the bulk of Toyota's employees -- some 8,200 workers -- will still be in Kentucky, where its engineering and manufacturing headquarters are located.

What it means to you: Toyota's move to Texas could mean more U.S.-built Toyota models, and the automaker's cost savings could benefit shoppers in the form of less-expensive cars.

author photo

Doug DeMuro has a wide range of automotive industry experience, from work at a Ferrari dealership to a manager for Porsche North America. A lifelong car enthusiast, Doug's eclectic vehicle purchases include a Porsche 911 Turbo, an E63 AMG wagon, an old Range Rover and a Mercedes Benz G-wagen.

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