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The board of executives of Toyota Motors Corporation in Japan decides to halt its production of the Prius in the United States. The decision comes amid lowering prices of fuel resulting to a slump in sales of the hybrid car.
Up to when the Prius project will be frozen is still not known. What is evident is the 32% drop in sales that Toyota experience in November of 2008.
Prius sales dramatically dropped year over year coming from 16737 units sold in November of 2007 to just 8660 cars in 2008.
The Tupelo, Mississippi Toyota Plant which is the heart of the production plans in the US has an estimated cost of $1.3 billion. The building is 90% complete but the decision comes before ordering equipment that will go into the car plant.
The Tupelo assembly line is originally planned to build Highlander crossovers but this was discarded when the sales of SUVs dropped because of increasing fuel prices. The course of action was focused on producing Prius hybrids to answer the needs of the market.
The situation reflects the growing pressure on the global earnings of the Japanese car maker. The company aims to hit $6.6 billion of profit amid the reduction in production. This will be done by lowering the number of temporary employees in Japan, holding construction of car plants, and reduction of salary and bonuses of the top bosses.
Toyota has several factory constructions going on aside from the US project. It is planning to increase its production in China and is also building its presence in India and Brazil.
More news on this pause of production in the us on Wheeltronix.
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