Good Times
12-16-2008, 03:25 PM
DETROIT, Dec 15 (Reuters) - Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) is suspending completion of its newest plant in Mississippi indefinitely in response to a "steep decline" in U.S. industrywide auto sales, the automaker said on Monday.
The plant near Tupelo, Mississippi -- Toyota's eighth assembly plant in North America -- was slated to produce Prius hybrids beginning in late 2010.
The latest move by Toyota, No. 2 in U.S. auto sales after General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), underscores the pressure across the industry, as U.S. auto sales have slumped to their lowest levels in 25 years amid weak consumer confidence and tight credit.
The White House is considering emergency funding for GM, Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC, which have been pushed to the brink of failure, after U.S. Senate Republicans rejected a $14 billion bailout last week.
"Due to the uncertainty of the market, it is impossible to say at this time when production will begin," Toyota said in a statement.
"Toyota continues to evaluate its operations globally and reduce production as necessary to match the weak market."
Toyota had already changed plans for the Mississippi plant in July, when it said it would produce better-selling Prius hybrids there, instead of the originally planned Highlander sport utility vehicles, in response to high gasoline prices that sent sales of trucks and SUVs plunging.
But the market downturn has accelerated dramatically in the second half of the year, hitting every automaker from GM to Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) and all segments of the market from trucks to fuel-efficient compacts and hybrids.
Toyota's U.S. sales plunged 34 percent in November from a year earlier -- slightly better than the overall U.S. market's 37 percent drop.
U.S. sales of its market-leading gasoline-electric Prius slumped 48 percent in November.
Toyota, which has slashed production to adjust to lower demand and built one-third fewer vehicles in North America than a year before, but it is still saddled with 92 days worth of inventory in the United States.
Toyota said it would finish construction of the Mississippi plant's building structure, which is 90 percent complete, but would hold off on equipment installation and other subsequent actions, delaying the start of production.
Toyota, which has invested $300 million to date for the plant, said that employees already hired for the Mississippi plant would keep their jobs. (Reporting by Soyoung Kim, editing by Gerald E. McCormick)
Source: Reuters (http://www.reuters.com/article/marketsNews/idUSN1532566020081215)
The plant near Tupelo, Mississippi -- Toyota's eighth assembly plant in North America -- was slated to produce Prius hybrids beginning in late 2010.
The latest move by Toyota, No. 2 in U.S. auto sales after General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), underscores the pressure across the industry, as U.S. auto sales have slumped to their lowest levels in 25 years amid weak consumer confidence and tight credit.
The White House is considering emergency funding for GM, Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler LLC, which have been pushed to the brink of failure, after U.S. Senate Republicans rejected a $14 billion bailout last week.
"Due to the uncertainty of the market, it is impossible to say at this time when production will begin," Toyota said in a statement.
"Toyota continues to evaluate its operations globally and reduce production as necessary to match the weak market."
Toyota had already changed plans for the Mississippi plant in July, when it said it would produce better-selling Prius hybrids there, instead of the originally planned Highlander sport utility vehicles, in response to high gasoline prices that sent sales of trucks and SUVs plunging.
But the market downturn has accelerated dramatically in the second half of the year, hitting every automaker from GM to Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) and all segments of the market from trucks to fuel-efficient compacts and hybrids.
Toyota's U.S. sales plunged 34 percent in November from a year earlier -- slightly better than the overall U.S. market's 37 percent drop.
U.S. sales of its market-leading gasoline-electric Prius slumped 48 percent in November.
Toyota, which has slashed production to adjust to lower demand and built one-third fewer vehicles in North America than a year before, but it is still saddled with 92 days worth of inventory in the United States.
Toyota said it would finish construction of the Mississippi plant's building structure, which is 90 percent complete, but would hold off on equipment installation and other subsequent actions, delaying the start of production.
Toyota, which has invested $300 million to date for the plant, said that employees already hired for the Mississippi plant would keep their jobs. (Reporting by Soyoung Kim, editing by Gerald E. McCormick)
Source: Reuters (http://www.reuters.com/article/marketsNews/idUSN1532566020081215)