Image: 2008 Toyota Prius
David Zalubowski  /  AP
Toyota will start producing the hybrid Prius in the U.S. for the first time starting in 2010.
updated 7/10/2008 11:04:03 AM ET 2008-07-10T15:04:03

Toyota Motor Corp. will start producing the hybrid Prius in the U.S. for the first time as the Japanese automaker adjusts its U.S. manufacturing operations to meet customer demands for smaller, more fuel-efficient vehicles.

The company said Thursday it will start producing the Prius in 2010 at a plant it is building in Blue Springs, Miss. Toyota already builds a hybrid version of the Camry sedan in Kentucky, but this will be the first time the Prius, which has been on sale for more than a decade, will be built outside of Asia.

The company also said it will suspend production of the Toyota Tundra pickup at its San Antonio truck plant and the Toyota Sequoia sport utility vehicle at its Princeton, Ind., plant for three months starting Aug. 8 because of declining demand. Next spring, it will stop producing Tundras in Princeton and will consolidate all truck production in San Antonio.

The Princeton plant will now make the Toyota Highlander SUV, which originally was scheduled to be made in Mississippi.

Toyota said it made the moves as U.S. demand for trucks and SUVs continues to decline. Toyota’s U.S. sales fell 21 percent in June compared with the year before, an even steeper decline than the industrywide slump of 18 percent. Sales of the Tundra were down 54 percent while sales of the Prius fell 34 percent as Toyota failed to keep up with growing demand.

“The truck market continues to worsen, so unfortunately we must temporarily suspend production. But this good news about production mix demonstrates our long-term commitment to our North American operations and to our team members, suppliers and communities where our plants are located,” Jim Wiseman, vice president for Toyota Motor engineering and Manufacturing North America, said in a statement.

Toyota said the workers who build its trucks and SUVs as well as the Huntsville, Ala.-based workers who build engines for the Tundra and Sequoia will stay on the job through the shutdown. The San Antonio plant employs 1,900 people, while the Princeton plant employs nearly 4,500.

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 moves follow production cuts at General Motors Corp. and other automakers. GM said last month it is cutting shifts, reducing assembly line speeds and temporarily idling seven factories because of declining consumer demand for truck-based vehicles. Chrysler LLC has announced plans to close a minivan factory and cut a shift at a full-size pickup factory, while Ford has said it is cutting production for the rest of the year.

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