Toyota to Build the Prius Hybrid in Mississippi

July 16, 2008

In yet another sign of how rapidly shifting consumer preferences are forcing automakers to change their long-term plans, Toyota Motor Corporation announced on July 10 that it will begin producing the Prius hybrid in Mississippi in late 2010. The Mississippi manufacturing plant, currently under construction, was originally intended to produce the Toyota Highlander sport utility vehicle (SUV), but with demand for SUVs falling rapidly, Toyota now plans to produce the Highlander at its Indiana plant, starting in late 2009. Toyota currently produces its Tundra full-size pickup truck in Indiana and Texas, but the company will cease production of the pickup in Indiana in the spring of next year. Toyota will also suspend U.S. production of the Tundra pickup and Sequoia SUV for about 3 months, starting in August. The Prius will be the second Toyota hybrid to be manufactured in the United States, as the company already produces the Camry Hybrid in Kentucky. See the Toyota press release.

Toyota's sales figures for June give some indication of the reason for the company's change of plans. Compared to sales for June 2007, sales of the Highlander SUV are down by 31.3% and sales of the Tundra pickup are down by 47%. The Sequoia SUV is currently bucking the trend, with sales up by 40.8% for June, even though it's the largest of Toyota's SUVs. But monthly sales of the Sequoia are low, at about 2,000 units, compared to about 10,000 Tundra sales and about 7,000 Highlander sales. The sales figures also show a 25.5% drop in sales of the Prius, but Toyota notes that the sales are being limited by a lack of supply, rather than a lack of demand. For the year to date, the Prius remains Toyota's third-best seller, behind the Corolla and Camry. Meanwhile, Toyota's smallest car, the Yaris, continues to gain ground, with a 4.1% increase in sales in June (compared to June 2007) and a 39.9% increase in year-to-date sales, compared to last year. See the Toyota press release.