Toyota, Reeling From Slump in Sales, Scuttles Plan To Make Priuses in U.S. in 2010
By Scott Doggett December 15, 2008
Toyota Motor Corp., reacting to a deep decline in U.S. sales, announced today that it will complete construction of its Blue Springs, Mississippi, factory but it has scuttled plans to produce Prius hybrids there in 2010.
Mike Goss, a spokesman for Toyota's U.S. arm, said that the plant's construction is about 90 percent complete and that Toyota will finish the building. However, installation of the factory's equipment and machinery -- "the most time-consuming" element of construction, he said -- is delayed indefinitely.
The roughly 100 people who were hired to oversee construction at the plant will not lose their jobs and will be assigned other duties, Goss said.
Although Toyota's U.S. sales have held up better than those of General Motors, Ford and Chrysler, the entire industry has seen a steep plunge, which Goss said forced Toyota to delay the plant's opening.
Carmakers industrywide have been having trouble making sales because consumers are skittish about making big purchases during the recession, and it has been more difficult and more expensive for some buyers to obtain financing in the tightened credit markets.
Toyota reported its auto sales in the U.S. fell 34 percent in November, while sales across the industry sank 37 percent. The company's sales are down 13 percent for the first 11 months of the year compared with the same period in 2007.
The Toyota City, Japan-based automaker has also seen volumes of its once-scalding hybrids plunge amid the collapse in gasoline prices. The Prius, which was a hot item when a gallon of gas fetched $4 a gallon this summer, saw its November sales plunge 48 percent.
All of the roughly 170,000 low-emissions, fuel-efficient Priuses sold worldwide last year were manufactured in Japan.
Toyota's other hybrids, including gas-electric versions of the Camry and Highlander, are facing even bigger sales declines. Additional details regarding Toyota's sales slide can be found at our sister site, Edmunds.com's AutoObserver.
The Mississippi plant, northwest of Tupelo, was initially to be up and running in late 2009 or early 2010, but earlier this year, Toyota pushed the date back to mid-2010 after seeing signs of a slowdown in the U.S. auto market.
Goss said Toyota has invested $300 million in the plant so far. At a ground-breakng ceremony in April 2007, Toyota officials said the plant had an annual production capacity of 150,000 vehicles and that the factory, which sits on 1700 acres, would create 2,000 jobs.
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