Toyota to Decide North American Site for Hybrid Auto

From Bloomberg.com


March 10 (Bloomberg) -- Toyota Motor Corp., the world's largest seller of gasoline-electric cars, will decide in June where in North America to build such vehicles, Toyota President Fujio Cho said.

Toyota at that time will also decide which hybrid model it will make in North America, the world's largest auto market, Cho said today in central Japan's Toyota City, where the company is based. At least 20 U.S. states, including the three where Toyota now builds autos, have contacted the company in hopes of winning a new production operation, Toyota officials have said.

Demand for fuel-saving hybrids could grow to as much as 10 percent of total U.S. new vehicle sales by 2010, Jim Press, Toyota's U.S. managing director, said last month. U.S. sales of Toyota's Prius more than doubled this year through February to 12,644 from 6,140 a year earlier. Honda Motor Co. and Ford Motor Co. also sell hybrids in the U.S.

Toyota will probably select an existing plant, rather than build a new one for the hybrid, said Joe Langley, an analyst for auto market forecaster CSM Worldwide in Farmington, Michigan. ``They'll want to leverage the expertise of current workers, rather than train new ones to do this,'' Langley said.

The company has U.S. auto assembly plants in Kentucky, Indiana and California and will open a plant in Texas next year. Toyota also builds vehicles in Ontario and Mexico's Baja California.

Now an Export

Toyota, the world's second-largest carmaker, exports the Prius to the U.S. from Japan. The company has said it will export its next two U.S. hybrids, the Lexus RX 400h and Highland sport- utility vehicles, when they go on sale this year.

Toyota has also said it's raising hybrid production capacity by about 50 percent to cut the waiting period for customers and double U.S. sales of such models to more than 100,000 units this year.

California Governor Arnold Schwarzenegger last November met with Toyota officials in Japan, including Cho, to persuade the company to make hybrids in the state. California is the biggest market for such vehicles.

Toyota has sold the Prius since 1997. The car is result of a $2 billion development begun in the early 1990s to create vehicles that burn less gasoline and meet increasingly strict air- quality rules in the U.S., Japan and Europe.

Hybrids combine an electric motor with a conventional gasoline engine to raise fuel economy. The electric motor powers the vehicle at low speeds, and braking recharges batteries that drive the motor.

Shares of Toyota fell 0.5 percent to 4,110 yen in Tokyo. They have fallen 1.4 percent this year. The company's U.S. shares rose 53 cents to $79.16 in New York Stock Exchange composite trading at 3:18 p.m.