Toyota suspends plan to build Prius hybrids in U.S. factories

Zimmerman is a Times staff writer

Plans to produce the Prius hybrid in the United States have been put on hold indefinitely, Toyota Motor Corp. said Monday.

Reports surfaced in Japan last month that the automaker was delaying the start of Prius production at its plant near Tupelo, Miss., until 2011 at the earliest.

Plans had called for the gas-sipping cars to start rolling off the line in 2010.

Now, as Prius sales continue to plunge along with auto sales in general, “it is impossible to say at this time when production will begin,” Toyota said in a statement.


Spokesman Mike Goss said Toyota remained committed to starting Prius production in Mississippi someday.

To date, Toyota has spent about $300 million of the Mississippi plant’s anticipated $1.3-billion price tag. The automaker plans to finish building the facility, now about 90% complete, but it won’t install the metal-stamping machines, robotics and other expensive equipment needed to assemble cars.

Prius sales plunged 48.3% to 8,660 in November compared with the same month a year earlier, worse than the 36.7% drop in overall U.S. light vehicle sales. The year-to-date picture is somewhat better, with Prius down 9.6% versus 16.3% for the industry overall.

Prius sales have been hit by a double whammy of falling gasoline prices and the U.S. recession, which is keeping buyers out of dealer showrooms. In the summer, when gas prices were topping $4.50 a gallon, dealers in Southern California were selling Priuses for $3,000 to $5,000 over sticker, said Jesse Toprak, executive industry analyst at auto information website


Those days are gone, Toprak said. Priuses occasionally sell below the sticker price, which ranges from $22,000 to $24,270, depending on the model.

Toyota now has about a one-month supply of Priuses in the U.S. compared with a 14-day supply a year ago. During the summer, the cars were basically selling as soon as they hit the lot. Overall, Toyota has a 73-day inventory of cars in the U.S.

There may be further bad news for the Prius on the horizon. Honda’s new five-passenger Insight hybrid is due out next year, and the talk is that it will have a base price around $17,000.

“It’s going to be the most serious competition Prius ever had in the U.S. market,” Toprak said.