In yet another sign of how rapidly shifting consumer preferences are forcing automakers to change their long-term plans, Toyota announced last week 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, 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 three 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.
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 percent and sales of the Tundra pickup are down by 47 percent. The Sequoia SUV is currently bucking the trend, with sales up by 40.8 percent 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 percent 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 percent increase in sales in June (compared to June 2007) and a 39.9 percent increase in year-to-date sales, compared to last year.