Toyota halts planned U.S. based manufacturing of Prius

[MikeMike]

Lindsay Chappell
Automotive News
December 15, 2008 - 2:10 pm ET


NASHVILLE -- Toyota Motor Corp., with its sales plunging in the United States, is freezing its plan to build the Toyota Prius in a new plant near Tupelo, Miss. For how long? The automaker doesn't know.

Toyota's board in Japan reached the decision late today to halt the project "due to the steep decline" in U.S. sales.

Sales of the hybrid car have softened in recent weeks as gasoline prices dropped from a summer spike of more than $4 a gallon. The Prius sold 8,660 units in November, down from 16,737 in November 2007.

Total Toyota sales in the United States fell 32 percent in November.

This is the second time Toyota has changed plans on the $1.3 billion Mississippi project, which already has begun to draw component suppliers to the area.

In February 2007, Toyota announced it would spend $1.3 billion there to produce a new generation of Highlander crossovers. But after Toyota broke ground, SUV sales began to soften. In July of this year, Toyota said it instead would build the Prius there.

A spokeswoman for Toyota's North American manufacturing operations says the company will continue constructing the building, which is about 90 percent complete. The company made its decision today before it had begun ordering the equipment that would go into the plant.

Toyota has no timetable to resume the project, the spokeswoman says, but it will remain a Prius factory whenever the project restarts.

Thats not a good sign at all. This just shows that it's not just U.S. manufacturers... the $1B came from BBC World News. I dont like the prospect of me at only 22 and looking for a part time job right now, and then hopefully a job when i graduate in a few years.

 

[dmcowen674]

Another big empty building

 

[Slew Foot]

Im surprised the Prius only sells ~10K a month, I'd have figured something like 70-100K.

 

[spidey07]

Originally posted by: Slew Foot
Im surprised the Prius only sells ~10K a month, I'd have figured something like 70-100K.

They couldn't supply (manufacture) them fast enough, that's why they changed from the Sequoia to the Prius for the that plant.

Now demand for that model and all models in general is sharply down. Supply and demand.

So will P&N trumpet this and cheer for Toyota downfall?

 

[heyheybooboo]

State and local incentives for the plant around $370 million ....

 

[winnar111]

I wonder how well the Prius would sell if we didn't foolishly subsidize it.

 

[Rainsford]

Originally posted by: winnar111
I wonder how well the Prius would sell if we didn't foolishly subsidize it.

Pretty well...it STILL costs more than it's worth, but it's a symbol. People buy sports cars and big trucks despite their questionable price and practicality...the Prius just caters to another group interested in making a statement with their vehicle.

 

[Strk]

Originally posted by: Rainsford

Originally posted by: winnar111
I wonder how well the Prius would sell if we didn't foolishly subsidize it.

Pretty well...it STILL costs more than it's worth, but it's a symbol. People buy sports cars and big trucks despite their questionable price and practicality...the Prius just caters to another group interested in making a statement with their vehicle.

Image is everything. Toyota has the image of the "green" manufacturer. It doesn't matter that they have more SUVs and trucks than Ford and close to the same amount as GM. The only thing they lack is a heavy duty line of trucks.

It does suck though. No one wants to buy anything, so this just makes it that much more difficult for Ford and GM.

 

[MovingTarget]

But...but...but...the UAW! They must be responsible for this! No plant should have to close without them!

With the economy like it is, I can understand this move. What Toyota and the others need to produce is something that people can afford even in a recession like this one. I'm sure if they put their heads together they could come up with an econobox that could be had at a low enough price point. Hopefully this plant will be back to producing vehicles in no time...

 

[Pliablemoose]

Originally posted by: Slew Foot
Im surprised the Prius only sells ~10K a month, I'd have figured something like 70-100K.

That's because you live in California, this place is lousy with them, I've never seen so many in one place.

You occasionally see them in other states, but nothing like here in CA.

 

[spidey07]

Originally posted by: MovingTarget
But...but...but...the UAW! They must be responsible for this! No plant should have to close without them!

With the economy like it is, I can understand this move. What Toyota and the others need to produce is something that people can afford even in a recession like this one. I'm sure if they put their heads together they could come up with an econobox that could be had at a low enough price point. Hopefully this plant will be back to producing vehicles in no time...

It won't, not in no time. SOP has been delayed, delayed, delayed and now STOP.

Oh, and have you ever heard of Scion?

 

[Capt Caveman]

When oil goes back to $200 and gas to $10 in the near future, demand will go back up.

 

[MovingTarget]

Originally posted by: spidey07

Originally posted by: MovingTarget
But...but...but...the UAW! They must be responsible for this! No plant should have to close without them!

With the economy like it is, I can understand this move. What Toyota and the others need to produce is something that people can afford even in a recession like this one. I'm sure if they put their heads together they could come up with an econobox that could be had at a low enough price point. Hopefully this plant will be back to producing vehicles in no time...

It won't, not in no time. SOP has been delayed, delayed, delayed and now STOP.

Oh, and have you ever heard of Scion?

I realize that it probably won't. Sad really, as those were some good jobs for the people in the area.

As far as Scion is concerned, they are doing it wrong. The compact segment today starts at around $10k new. What I meant was something quite a bit lower, say sub $7k or $6k. Think 2 or 3 cylinder class as in some other countries. Toyota already has the Yaris vehicles to cover the compact segment as it currently exists.

 

[fleshconsumed]

Good move responding to changes in consumer demand. Too bad the big 3 still continue stamping SUVs.

 

[boomerang]

Originally posted by: MovingTarget
But...but...but...the UAW! They must be responsible for this! No plant should have to close without them!

With the economy like it is, I can understand this move. What Toyota and the others need to produce is something that people can afford even in a recession like this one. I'm sure if they put their heads together they could come up with an econobox that could be had at a low enough price point. Hopefully this plant will be back to producing vehicles in no time...

This speaks directly to a common misconception. It takes years for an automobile to hit the market from inception to the start of sales. The industry cannot just switch gears and head in a different direction at the snap of a finger.

I think the other thing a lot of folks don't consider is the tooling needed to manufacture that vehicle. It's not just molds and dies, it's automation equipment to facilitate the manufacture of those components and the tooling in the assembly plants themselves. Time and money.

There are no straight lines in a car. Look at any place in a car where two surfaces or components mate up. These are 3D surfaces. Sure, it looks easy, but there's plenty of effort involved. Again, time and money.

It's not at a all unusual to spend a billion dollars on the launch of a car. You've got to sell a whole lot of them to start seeing a return on that kind of investment.

 

[SP33Demon]

Not all that surprising with an economy in the crapper and sub $2 gas. If people aren't buying hybrids, think about what that means for SUV/Trucks...

 

[Wheezer]

Originally posted by: SP33Demon
Not all that surprising with an economy in the crapper and sub $2 gas. If people aren't buying hybrids, think about what that means for SUV/Trucks...

exactly....the cycle will continue.

 

[mooseracing]

Originally posted by: fleshconsumed
Good move responding to changes in consumer demand. Too bad the big 3 still continue stamping SUVs.

They sell mroe trucks than suv's, and they will continue since businesses need them.

Not to mention the new Toyota truck looks fugly as hell.

 

[Fingolfin269]

People aren't buying hybrids? People aren't buying shit. Loans aren't being handed out like candy anymore.

There is absolutely no point in Toyota opening a new manufacturing plant right now. I'll be more interested to see what happens with the VW plant being constructed in Chattanooga, TN.

 

[Thump553]

Last I knew (July) there was a six month plus waiting list for the Prius, you basically had no choice on the option level (ie, take what comes in on the truck when your number comes up) and pay full list price. Local dealers were selling program cars with 15K miles for $15k OVER the list price.

We bought one in January (before the gas price escalation) which went pretty normally) but I tried to get a second one until about October when I gave up. I was quite surprised to see Prius sales flat to down this year, but the explanation I've heard is a battery shortage.

I strongly suspect the shuttering of this plant is not due to a lack of demand for the Prius, but rather a desire on Toyota's part to keep the production in Japan.

 

[dmcowen674]

Originally posted by: Thump553
Last I knew (July) there was a six month plus waiting list for the Prius, you basically had no choice on the option level (ie, take what comes in on the truck when your number comes up) and pay full list price. Local dealers were selling program cars with 15K miles for $15k OVER the list price.

We bought one in January (before the gas price escalation) which went pretty normally) but I tried to get a second one until about October when I gave up. I was quite surprised to see Prius sales flat to down this year, but the explanation I've heard is a battery shortage.

I strongly suspect the shuttering of this plant is not due to a lack of demand for the Prius, but rather a desire on Toyota's part to keep the production in Japan.

Ah the real facts.

 

[spidey07]

Originally posted by: Thump553
Last I knew (July) there was a six month plus waiting list for the Prius, you basically had no choice on the option level (ie, take what comes in on the truck when your number comes up) and pay full list price. Local dealers were selling program cars with 15K miles for $15k OVER the list price.

We bought one in January (before the gas price escalation) which went pretty normally) but I tried to get a second one until about October when I gave up. I was quite surprised to see Prius sales flat to down this year, but the explanation I've heard is a battery shortage.

I strongly suspect the shuttering of this plant is not due to a lack of demand for the Prius, but rather a desire on Toyota's part to keep the production in Japan.

No. It's that they aren't selling cars. It's real simple and I know this is the reason (have friends that work for TEMA).

You don't UP production when you can't even sell the ones you currently produce, especially since your sales continue to tank 25-35% each quarter.

 

[The-Noid]

Toyota is the most overrated company in the world.

 

[Zorba]

Originally posted by: Yoxxy
Toyota is the most overrated company in the world.

Ever heard of Bose?

 

[Ktulu]

Originally posted by: dmcowen674

Originally posted by: Thump553
Last I knew (July) there was a six month plus waiting list for the Prius, you basically had no choice on the option level (ie, take what comes in on the truck when your number comes up) and pay full list price. Local dealers were selling program cars with 15K miles for $15k OVER the list price.

We bought one in January (before the gas price escalation) which went pretty normally) but I tried to get a second one until about October when I gave up. I was quite surprised to see Prius sales flat to down this year, but the explanation I've heard is a battery shortage.

I strongly suspect the shuttering of this plant is not due to a lack of demand for the Prius, but rather a desire on Toyota's part to keep the production in Japan.

Ah the real facts.

How is this a fact with any sort of supporting evidence. I've also heard that some dealership are offering cash back on Prius' to help move them.

Save $2000 on 09 Prius