Toyota Camry to receive $30 billion in tax breaks
Toyota is planning to make a $30.9 billion tax refund to shareholders this year, and is set to add an additional $1.5 billion in federal incentives for 2019.
The $30-billion cash infusion will be a boon for shareholders, the company said Wednesday, adding that it would also increase the number of vehicles on its U.S. assembly line by 500,000 and the number shipped per month to nearly 600,000 vehicles.
The automaker said it expects to ship nearly 400,000 Camrys this year.
The company is expected to deliver its next-generation Camry sedan in 2021, which will be the first model to get a turbocharged engine, with the first vehicle to enter production slated to be the 2021 Camry SE.
The company expects to deliver another 500,00 Camrys and another 200,000 in 2019, while the first 200,00 will arrive in 2021.
The company said it will add $2.4 billion in additional tax credits for 2019 and 2021 to help meet the $6.7 trillion government bailout that was announced in December.
Toyota said it has set aside $2 billion in an account that will be used to reduce its corporate tax rate by 25 percentage points in 2019 and by 30 percentage points over the next four years.
The move is part of a broader corporate tax plan that the company has promised to roll out in the next few years, which it has said would generate more than $10 trillion in tax savings over a decade.
The U.K.-based automaker is on track to deliver 1 million Camrys to dealers by the end of 2021, according to its 2017 annual report.
The automaker has been expanding the assembly line at its plant in Las Vegas since 2019, and now plans to add 600,00 vehicles per month.
The first 300,000 are expected to arrive in 2022.
“Our commitment to delivering high quality, affordable, and fuel-efficient vehicles continues to be our core value proposition, and the tax incentives we are introducing in 2019 will make that more clear,” Toyota Chairman Hiroshi Yamamoto said in a statement.
At the same time, the automaker will be offering an extra $1 billion in incentives to help the automakers plant in Kentucky meet emissions standards.
The U.P.E. rule would require all new vehicles built in the U.W. to comply with emission standards by 2040.
Toyota has pledged to meet emissions by 2021, but the automaking plant is scheduled to close in 2020.
The tax incentives announced Wednesday were the result of a deal that the automakings board of directors struck with the U:re Corporation, a holding company owned by the government of Spain, in 2016.
The deal allows Toyota to claim tax credits of up to 20 percent of its worldwide profit.
The government also helped to offset the cost of the deal.
The deal was negotiated under the Trump administration, which has been criticized by U.N. officials for failing to adequately protect U.s. auto manufacturing, which makes up more than half of global auto production.
The government has said it is unlikely to grant Toyota’s request for additional tax incentives as long as the automarkets tax base remains at a low level, and as the U.:re Corporation continues to operate under its current ownership structure.
The European Union has threatened to take action against the automaken corporation if the tax credits are not extended, and it has been in negotiations with the United States government on an extension.