Toyota cuts Prius production by 10%

This could make the cost go up.

 

It puts a chill on the Mississippi plant too.

Bob Wilson

 

It'll be ashame if Prius in Mississippi plant is "Siked".

 

Very clever.

 

it is what it is.

 

While NA sales were the driving force in the development of the Gen 2 Prius, the JDM sales during 2009 were the driver for the Gen 3's. The Japanese gov't has had very strong incentives in the market for JDM buyers to purchase hybrids. Japan however is still a relatively small auto market.

Once these incentives have expired or run through their effectiveness the huge demand in the JDM was bound to slack off. The Prius had never been the No 1 vehicle in the JDM before this year. Also with the weak US$ there was no real incentive to export to the US, keeping sales at home was far more profitable. OK so now that changes. New markets have to be tapped.

I read when the G3 debuted that the goal for Year 1 was production and sales of 500,000 units. This is the end of Year 1. If they were running at 50,000 units per month...


Regading cost, it should have no effect IMO. The currency is far more important. Once Fixed Costs are amortized for each model that model becomes a cash machine, an ATM for the bottom line.

 

Sure, the recall is an input to these decisions, but one of MANY other considerations. Simply put, production level changes (upward or downward) happen ALL THE TIME to adjust to market conditions. This one just gets news because of the current media interest.

Doug Coleman
Prius Product Manager
Toyota Motor Sales, USA

 

That's believable. When is the last time Toyota initiated a 10% cut?

 

Please tell me that's not sarcastic.

If it is... take a look at our recent sales versus the peak before the economy tanked. Most of our series are way down - we sold fewer, so we cut production all over the place. This is just one of many adjustments.

Doug Coleman
Prius Product Manager
Toyota Motor Sales, USA

 

It wasn't meant to be sarcastic. I should have remembered that the overall economy tanking did the same to the entire auto industry. This is different though isn't it. For example here are the top 10 industry wide sellers for Feb, 2010. Almost all are up from 09 as are the YTD numbers. To me this clearly shows the reason for the 10% cut and it isn't the overall economy like the last time. It has to be the growing image problem since the cars are as good as they ever were. All negative numbers are in red.

Top 10 vehicles, current month's sales

Feb 2010,...... % Chg from Feb '09,..... YTD 2010,.... % Chg from YTD 2009


Ford F - Series PU 32,895 39.3 60,525 23.9

Honda Accord 20,024 25.3 39,046 19.9

Chevrolet Silverado PU 19,822 0.2 42,594 -2.7


Toyota Corolla / Matrix 16,996 -6.1 34,117 -8.6


Toyota Camry / Solara 16,552 -19.8 32,344 -21.9

Honda Civic 16,471 5.0 31,164 4.3

Ford Fusion 16,459 116.5 28,638 81.8

Nissan Altima 16,198 1.2 34,834 15.6

Ford Escape 15,156 50.2 25,909 40.4

Chevrolet Malibu 15,150 31.6 31,589 51.7

 

Much more likely that Toyota's profits will go down!

 

Oh, yes. No doubt that Feb 2010 sales for Toyota were greatly affected - either from stop-sales or from buyer concerns. But the production changes for Prius are the result of a global, forward-looking decision, not a direct result of last month's sales (that's just one input).

Doug Coleman
Prius Product Manager
Toyota Motor Sales, USA

 

The Prius cut shouldn't be a surprise to anyone. There is a reason why they are sitting on lots & selling for under invoice--supply exceeds demand. This was happening last year then accelerated this year. Overall sales this year will probably be fantastically better than last year but still depressed when compared to prior years.

The unemployed aren't going to rush out to buy new cars this year.

 

Wow. Certainly looks like Everyone is profiting at Toyota's expense.

As for Prius production being cut. As mentioned in other posts - Priuses are starting to pile up in the dealer lots. What's surprising is that Toyota hasn't cut prices to move cars - either for the Prius or for the rest of the lineup. I guess that it makes more sense financially to just cut back production than to load up the dealers with more cars (that won't sell).

I suspect that Prius sales (again) will now depend on what happens to the price of gas. If gas starts shooting back up to $4 a gallon, one would think that all will be forgiven and Toyota won't be able to make enough (Priuses) unless there actually is a real problem that Toyota is still hiding that gets revealed in some sort of ugly scenario.

 

As everyone knows, it's all about supply and demand. Lot's of supply now due to the media and issues.

 

The sales should rebound. This media coverage exposed how advanced and well designed the Prius really is.

There are many people that were unaware of the advantage of the "gear shifter" right on the dashboard. Unfortunately, it was moved in the gen3.

 

And when that happens, the quickest fix you can make is to cut the production of new cars to ease the supply. Everyone (other than maybe Subaru and Hyundai) else has had to do that in recent history; Toyota is not immune.

True that. Consumption drives something like 70% of economic growth in the U.S. When the consumers are wondering if they are going to have a job next month, they aren't exactly in a mood to go out and buy a car.