Nummi "Prius" Model May Be Stillborn As Toyota Revamps New U.S. Plant To Make Prius

[Perian]

Link: http://biz.yahoo.com/rb/080710/toyota_us.html?.v=1



TOKYO (Reuters) - Toyota Motor Corp will switch gears and produce the Prius hybrid instead of the less fuel-efficient Highlander sport utility vehicle at its planned Mississippi factory, the Nikkei business daily reported on Thursday.

The change in plans may mean the Mississippi factory, which will churn out the Prius as well as other cars, will not come onstream until 2011, the Nikkei said, at least a year behind original plans.

A Toyota spokesman said the company could not comment on the report. A source familiar with the matter said an announcement regarding North American manufacturing operations could come as early as Thursday in the United States.

Hit by an industry-wide slump in sales of large, gas-guzzling vehicles due to soaring fuel prices, Toyota's sales in the United States, its single-biggest market, have fallen 6 percent so far this year. Its sales of light trucks such as SUVs and pickups are down 12.5 percent, forcing it to run its Indiana and Texas light-truck factories at a reduced pace indefinitely.

In contrast, Toyota is struggling to keep up with runaway demand for the gasoline-electric Prius model, which saves fuel by capturing energy lost during braking to power an electric motor.

At the end of June, Toyota had a one-day supply of the Prius hybrid, imported from Japan, and a 2- day supply of its hybrid Camry sedan assembled at its Kentucky plant.

"All in all, it would be a positive step in the midst of this hellish situation," UBS auto analyst Tatsuo Yoshida said, referring to the worse-than-expected slump in the U.S. market this year.

"It shouldn't affect their capital expenditure plans too much either," he added.

Sales of the Prius, the world's most popular hybrid car, fell 26 percent in the United States as dealers ran short of inventory and customers faced a six-month waiting list. Toyota said it would only partly be able to satisfy the backlog of demand from Japan this year due to a shortage of battery supply.

Toyota has already delayed by at least five months the start of production at the Mississippi plant to May 2010. It had planned to start at a production volume of 120,000 vehicles, just 80 percent of capacity. The Highlander, a crossover-type SUV sharing a platform with the Camry, is now imported from Japan.

Full article at link.

[Perian]

Here's hoping the Volt won't retail at $ 40,000.

Original story here:
Toyota and GM in talks about NUMMI........ and possible Prius production there

[WishIhadatruck]

Originally Posted by Perian

Here's hoping the Volt won't retail at $ 40,000.

Original story here:
Toyota and GM in talks about NUMMI........ and possible Prius production there

I'm afraid the Volt will be closer to $40k than $30k. At that price it won't be a volume competitor to the Prius no matter how good it is. Hopefully they can find a way to bring the price down quickly. Offering a 1/2 sized battery which we've heard about would be one option. Even with 1/2 a battery it will be a better PEV than the Prius.

If the next gen. Prius is delayed being manufactured in the US it can still launch on time in Japan and be imported here just like today, correct? It seems unlikely this means a delay in the launch, just a delay in their ability to achieve higher volumes of production.

[69Firebird400]

Originally Posted by WishIhadatruck

I'm afraid the Volt will be closer to $40k than $30k. At that price it won't be a volume competitor to the Prius no matter how good it is. Hopefully they can find a way to bring the price down quickly. Offering a 1/2 sized battery which we've heard about would be one option. Even with 1/2 a battery it will be a better PEV than the Prius.

If the next gen. Prius is delayed being manufactured in the US it can still launch on time in Japan and be imported here just like today, correct? It seems unlikely this means a delay in the launch, just a delay in their ability to achieve higher volumes of production.

I would assume that you are correct. They are going to reveal the 2010 Prius in Detroit this January (plus likely a Lexus hybird-only vehicle), so my expectation is that they still have the same Prius production capacity that they had this year until the Mississippi plant comes online for Prius production.

Very interesting news!

[Ambalanche]

GM needs to get the 2-mode in the midsizers pronto!

[mjd1001]

Originally Posted by Perian

Here's hoping the Volt won't retail at $ 40,000.

Original story here:
Toyota and GM in talks about NUMMI........ and possible Prius production there

Somehow, I don't think it will matter the first year what the price is for most of us. If it was closer to $30,000, there would be such demand that the dealerships would jack up the cost to close to $40,000 anyway. I'd rather it 'retail' at $40,000.

[AMERICA 123]

Well, goody, goody.

This is great news for all of Toyota's competitors - including GM.

And for Toyota ?

Well, lets see.

Does this help for 2008 ? NOPE.

Does this help for 2009 ? NOPE.

Does this help for 2010 ? Eh, ..... maybe a little.....maybe not.

Does this help for 2011 ? Yes, but how much - and exactly when.

************************************************** *****

Anyway, this ought to help lay to rest the myth of their rapid

responsiveness in terms of factory change overs.

[AMERICA 123]

Actually, there is more here from Perian's original link -ie from REUTERS than AP ended up reporting.

The world's biggest automaker is also likely to suspend production at one of two assembly lines at its Indiana factory, where it builds the Tundra pickup and Sequoia SUV, by year-end for at least six months, the paper said.

Citing company sources, it said the move was in response to falling demand for those models and would amount to a production cut of 50,000 vehicles a year.

During the stoppage, Toyota will modify the line to allow for more flexibility to build other models, the paper said in its evening edition.


Toyota has already delayed by at least five months the start of production at the Mississippi plant to May 2010.

It had planned to start at a production volume of 120,000 vehicles, just 80 percent of capacity. The Highlander, a crossover-type SUV sharing a

platform with the Camry, is now imported from Japan.

Hoping to tap the lucrative large pickup truck segment, Toyota opened a factory to build up to 200,000 Tundra pickups a year in San Antonio,

Texas, in 2006.

Last year, production fell far short of capacity, at 139,000 units.

Do the math.

Sounds like they have installed capacity at Princeton IN and San Antonio TX of approx. 400,000 units (w/o accounting for the number of shifts) -

for Tundra/Sequoia and Tundra/Tundra.

That in turn sounds as if they actually expected to sell annually 250,000 to 350,000 of the Tundra - if you take off 150,000 to 50,000 for the

Sequoia.

Now we also know it takes 6 months for them to retool in the easiest circumstance - moving one line at one plant - and that doesn't

represent the full number - they've recently needed ( at the min.) an additional 1.5 to 3.0 plus months....... to debug everything.

If you look at what actually happened with the 2009 Corolla as far as schedule slipping - its even more than that .

From other recent news releases total slippage has added up to more than a year of extra delay.

Now that we know all this, it would be interesting to go add up production and sales numbers for Sequoia and Tundra for 2007.

[stormwatcher]

We have been "doing the math" A123. That's why things look so discouraging.

Toyota isn't closing any factories. In fact, they haven't even opened the Mississippi factory yet. And there is a brand new Toyota factory opening in Woodstock, Ontario in a few months to build RAV4s.

[vcs2600]

Sounds like California wouldn't cough up any incentives, while Mississippi did.

[Geotpf]

Here's Toyota's actual press release on this:

http://pressroom.toyota.com/Releases...T2008071034962

Highlights:

The Prius is going to be made in the new Mississippi plant starting late 2010.

The Highlander, which was going to be made in Mississippi originally (and, like the Prius, is currently made in Japan), will be made at their existing plant in Indiana starting Fall 2009, which currently makes the Tundra, Sequoia, and Sienna.

All production of the Tundra will moved to their Texas plant starting Spring 2009.

There will a complete production shutdown of the Sequoia in Indiana and the Tundra at both Indiana and Texas starting August 8 until November, as well as at the Alabama plant that builds the engines for them. Employees will still report to work and be paid. I'm sure they have some sort of "team building" crap for them to do.

My comments:

The shutdown at the plants building the Tundra and the Sequoia must be embarrassing and expensive, especially since the Texas plant is brand new, but is clearly needed.

Now, originally the plan seemed to be to build the Prius at NUMMI, and then maybe consolodate Tacoma production at their lone Mexican plant. But it looks like they are thinking that Prius demand will be too high for even the combination of their current Japanese plant plus one line at NUMMI, so they are giving the entire Mississippi plant for the Prius. I personally think they are still underestimating demand-I can see an argument to do both (build the Prius at both NUMMI and Mississippi (and in Japan)). Maybe the joint venture-ness of NUMMI is preventing this (IE, they don't want GM to see too closely Prius production).

I don't understand why Sequioa production isn't moving to Texas too, considering that it's basically a SUV version of the Tundra. Maybe it is and they just left it off the press release.

As for the Volt, if it doesn't cost the same price (within a few grand) as the Prius, it will fail in the marketplace, especially since now that, after the Mississippi plant comes online, there should no longer be any shortages of the Prius. So, it has to cost $25k or so maximum (current Prius price is $22,160, including destination), not $30k, not $40k.

[AMERICA 123]

Originally Posted by vcs2600

Sounds like California wouldn't cough up any incentives, while Mississippi did.

Probably - almost for certain - but there is more to it than that.

NUMMI is union and the contract is coming up in what a year and half to two and half ?

(An all new plant in Kalifornia isn't even remotely feasible).

Even non union semi skilled and skilled labor in Kalifornia costs more than Mississippi - unless it's illegal alien - migrant farm worker wages.

Kalifornia is also way more expensive to ship to and fro - all this production will undoubtedly go to east of the Mississippi River - Japan will possibly cover points west or something similar - for a while.

The biggie tho, is given shipping costs from Japan etc - NAFTA sourced parts are now even more desirable - Mississippi is way better located for that as well - especially in regards to existing Toyota infrastructure and likely future expansion in all three Nations.

Mississippi also has way better rail route access.

If abuncha' things go a certain way, Kailfornia might become of interest versus Japanese production - other than that - high fuel - shipping price/ yen/dollar driven possibility they are completely non competitive.

Hell, they're even losing all the design studios and Nissan is doing as well or better since they left - with much lower costs.

[Geotpf]

Originally Posted by AMERICA 123

Probably - almost for certain - but there is more to it than that.

NUMMI is union and the contract is coming up in what a year and half to two and half ?

(An all new plant in Kalifornia isn't even remotely feasible).

Even non union semi skilled and skilled labor in Kalifornia costs more than Mississippi - unless it's illegal alien - migrant farm worker wages.

Kalifornia is also way more expensive to ship to and fro - all this production will undoubtedly go to east of the Mississippi River - Japan will possibly cover points west or something similar - for a while.

The biggie tho, is given shipping costs from Japan etc - NAFTA sourced parts are now even more desirable - Mississippi is way better located for that as well - especially in regards to existing Toyota infrastructure and likely future expansion in all three Nations.

Mississippi also has way better rail route access.

If abuncha' things go a certain way, Kailfornia might become of interest versus Japanese production - other than that - high fuel - shipping price/ yen/dollar driven possibility they are completely non competitive.

Hell, they're even losing all the design studios and Nissan is doing as well or better since they left - with much lower costs.

A very large percentage of Priuses are sold in California, as well as in Oregon and Washington and Nevada. Making them in California instead of Mississippi actually makes sense from a shipping/logicistical standpoint because of this.

The reason was more likely that that NUMMI doesn't have enough capacity to build enough Priuses to meet demand, and that the new Mississippi plant has too much capacity to build only Highlanders (the original plan). And, since the Tundra has too much capacity, they move the Indiana production to Texas of the Tundra, then the planned Mississippi production for the Highlander to Mississippi (most Tundras are built in Texas already, the Tundra line in Indiana is smaller), and then they have an entire new plant to build the Prius in instead of only a little bit inside an older one (NUMMI).