July 10, 2008

Toyota to idle truck, SUV plants, begin US assembly of Prius

Responding to the decline in sales that prompted GM's shift from light trucks, Toyota will idle its Tundra and Sequoia production line in San Antonio, Texas for three months starting August 8.

While sales of the Sequoia SUV rose marginally, sales of the recently redesigned Tundra fell by 54 percent last month, signalling a reaction by consumer to sustained high oil prices and dragging Toyota's overall monthly sales down by 21 percent for the month.

Production of the Sequoia full-size SUV will also be idled at Toyota's plant in Princeton, Indiana. Production of the Sienna minivan will continue at Princeton during the transition, spokesman Mike Goss said.

During the shutdown, the Princeton plant will switch to the smaller and more fuel efficient Highlander SUV, which originally slated to be built at the Blue Springs, Mississipppi plant currently under construction.

Instead, the Mississipppi plant will begin production of the Prius hybrid in late 2010. This will be the first factory outside of Japan to produce the iconic hybrid.

The increase in production comes in response to a sustained increase in demand brought about by $4-per-gallon gasoline in the United States.

As reported by the Associated Press, sales of the Prius fell 34 percent last month as Toyota failed to meet demand for the 46 miles per gallon car. Priuses are sitting on the lot for just four or five days before they're sold, according to Tom Libby, senior director of industry analysis for the Power Information Network, a branch of J.D. Power and Associates.

By contrast, the Toyota Tundra pickup is on the lot for an average 64 days before it is sold.

Toyota has 13 North American plants and two under construction in Mississippi and Ontario. The automaker has more than 43,000 workers in North America.

Toyota's U.S. shares rose $1.12, or 1.2 percent, to $92.60 in New York trading today, following the announcement.


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