Toyota suspends work on Mississippi Prius plant

More articles (basically stating the same thing) here:

Wall Street Journal

Detroit Free Press

You would think they would have opened the plant ready to make the 2010 Prius out of the gate. Wonder if they are retooling their production process, and going to refine it overseas first, then copy that here?

The Mississippi plant was originally intended to make the Highlander SUV. It was part of Toyota's expansion into the very profitable SUV and truck market in North America. When the SUV market collapsed Toyota decided to make the Prius there instead. That makes sense because more that 60% of Prius sales are in the US. The plan was to start production in Japan in 2009 and then add production in the US when the Mississippi plant was finished.

US auto sales are only projected to be 2/3 their normal levels in 2009 and only slowly recovering through 2012. Toyota has way too much production capacity. This will be worse if the US buyer continues to turn away from SUV's and trucks. Half of Toyota's production capacity in the US is dedicated to light trucks.

Indiana: Sienna, Highlander
Texas: Tundra, Sequoia
Kentucky: Camry, Avalon, Venza
Canada: Corolla, Matrix, Lexus RX
NUMMI: Vibe, Corolla, Tacoma

:redface:For the DUMMI....where is NUMMI?

NUMMI is New United Motor Manufacturing, Inc opened in 1984. It was Toyota's first assembly plant in the US and is a joint venture with GM. NUMMI currently makes the Tacoma, Matrix, and Pontiac Vibe. Previously it made the Corolla and Chevy/Geo Prism.

Toyota has publicly talked about ending production at NUMMI when the current UAW contract ends in 2010. GM has said they will be eliminating the Vibe in the restructuring of the Pontiac brand. Every thing points to NUMMI shutting down in 2010.

i wonder if its because of an economic slowdown... or the falling gas prices!

Yes.

It's not like it's only Detroit that's hurting. Looking at this list, I'd surmise the plants in Kentucky and Canada might be around longer than the others. At least until all the manufacturing goes back to Japan.

If Toyota ends production at NUMMI in 2010 the Corolla production would be consolidated to the Canadian plant. That leaves the Tacoma which could go to the Tundra plant in Texas. Of course that is if Toyota keeps selling the Tacoma in the US. The small and mid-size truck is a dying breed. So far Ford, GM, and Nissan have announced they will be killing off their small trucks. This is exactly what I predicted when the new CAFE law separated trucks into classes based on footprint instead of averaging all trucks together. Manufacturers no longer have to make small, inexpensive trucks to offset the large and profitable trucks.

I wonder if they would now loose their "TAX" breaks they got for building there... No Plant.. no new JOBS... BUT, lots of improvements made to a big chunk of land that is now worth $$$$$$$$... and we all know that local/state Gov's like to line their pockets... err... I mean Tax for the Better Good.

I know I would start taxing Toyota as they are not using the property for it's tax break intended use. It now will be a empty completed building.

I wouldn't think too much of this. It's just normal business operating procedure during a decrease in demand. Toyota will NOT be abandoning this plant that they just built. It will simply be "sitting on hold and waiting" until demand picks up again.

I just hope this is not a result of current lack of demand for the Prius all of a sudden.

I agree Rybold, they won't fit out until ready for production, why spend the money now on machines that will sit idle for a year or two? Even at 2% interest there is no pont creating debt or spending cash into an idle factory. The economy will turn and work will resume, it's all just a matter of when.

Toyota will avoid closing out of US production because it is good for their image and gets punters into showrooms. 2/3 is better than 0 when it comes to car sales.

When we toured the Georgetown KY plant, they told us their tool shop would build the dies for the Mississippi plant. But the Georgetown plant just started making the Venza, cross-over SUV, just in time for the recession.

The real issue is traction batteries since that was limiting the Camry Hybrid production too. If they build batteries, they can continue to expand the hybrid drive train offering in more vehicles, a good thing.

Bob Wilson

Well if they don't want to install machines and start making Prius cars there can be only one reason - not enough demand for Prius. They DID change its purpose to build Prius instead of trucks when truck demand fell. So if they now don't want to make Prius either then ... seems kinda obvious, no?

For the time being while car market is so low they will likely sell more cheaper Corolla and other cheaper models, so Prius demand will decline. It makes perfect sense to keep this building on ice until the market recovers and then finish it for Prius.

The only and real issue right now is that demand for $20K+ cars is down. Makes no difference how they work, if they have batteries or not.
Also I am still shocked that trucks are back above cars?!?!

Green Car Congress: US Light Duty Vehicle Sales Plunge 36.7% in November

um, they stopped working on new plants because they have a lot of unused capacity around to world to build cars... They will have capacity to build 10 million cars around the world in 2009 with those plants up. That means that at these current sales - 30% down, they have 3 million of unused capacity right now... why would they add new plants?

As to the batteries, Toyota has already upped the production to 700,000 in 2009, and 1,000,000 in 2010. Batteries wont be issue again.

why dont you check sales sheets before posting things like that?
Tacoma is selling great...

Fremont, California