Toyota Motor Co. will build the Prius hybrid sedan at its new plant under construction near Tupelo, Miss., beginning in late 2010, rather than the midsize Highlander crossover utility vehicle as originally planned, the automaker announced Thursday.
Production of the Highlander, which is now assembled in Japan, will be transferred to Toyota's Princeton, Ind., plant in fall 2009, while production of the full-size Tundra pickup truck will be discontinued in Princeton and consolidated at the company's plant in San Antonio, Texas, in spring 2009.
Toyota also said it would suspend Tundra production at the Indiana and Texas plants for three months, beginning Aug. 8, to allow sales to catch up with inventory.
Tundra sales are off more than 12 percent this year, and dropped 59 percent in June compared with the same month last year.
Employees at the Tundra plants will continue to report to work during the production hiatus, and will receive full pay, the company said. They will undergo training and be given other duties during the shutdown, Toyota said.
The new Mississippi plant, announced last year after a selection process that included a site in Chattanooga as runner-up, will become the first North American assembly point for the popular Prius, a midsize sedan that has a gasoline-electric drive system with fuel economy in excess of 40 miles per gallon.
Toyota already builds a hybrid version of its Camry midsize sedan in the United States, at a plant in Georgetown, Ky.
Shifting the new Mississippi plant to production of the Prius means it will open at least six months later than originally planned, Toyota said.
The Chattanooga site that Toyota nearly chose for the new plant is now under consideration by Germany's Volkswagen for its first U.S. assembly plant since it closed a manufacturing facility in New Stanton, Pa., in 1988. That decision could come next week.
Also in the running for the new VW plant is a site along Interstate 65 in Limestone County, Ala., about 100 miles south of Nashville.
Volkswagen said this week that its supervisory board — similar to an American corporation's board of directors — is expected to decide July 15 whether to build a U.S. plant, and if so, where to put it.
The company has said that a site in Michigan also is being considered, but analysts have said they doubt that Volkswagen would locate a plant there because of potential labor problems associated with Michigan's strong support of unions.
Chattanooga and Hamilton County officials hope VW will choose their site for the plant. The proposed tract near Chattanooga, the Enterprise South Industrial Park, is the former site of the Volunteer Army Ammunition Plant, 12 miles north of Chattanooga's downtown.
That plant is expected to cost up to $1 billion and employ up to 2,500 people.
Volkswagen plant decision expected July 15
GM whomps Toyota, but sales still dive
