Japanese auto giant Toyota said Thursday that it plans to start assembling its fuel-sipping Prius hybrid car in the United States with production slated to begin in late 2010.
Toyota announced plans to start US production of its gasoline and electric powered hybrid car as rival US auto firms like General Motors, Ford and Chrysler suffer sharp sales declines for gas-guzzling trucks, pickups and sport utility vehicles (SUVs).
“Prius, which will join the Kentucky-built Camry Hybrid as the second Toyota hybrid built in North America, enables Toyota to better respond to increased consumer demand for hybrid vehicles,” Toyota said.
US consumer demand for hybrids and more fuel-efficient vehicles has increased in the past year as world oil prices have spiked dramatically. The surge in oil prices has stoked gasoline prices, making Americans more wary of the cost of the fuel they pump into their vehicles.
A new Prius can run to around 48 miles (77 kilometers) per gallon of fuel in city traffic compared to a large SUV which may run to 13 miles (21 kilometers) a gallon depending on how each vehicle is driven.
Such fuel economy can cut hundreds of dollars off an annual fuel bill for Prius drivers.
Proud owners who post messages on websites like “the Prius owners group” boast about the car's fuel economy, and of how they take long highway trips without worrying about their gasoline bills.
Toyota said it planned to start producing the Prius at an assembly plant presently under construction in Blue Springs, Mississippi. The first US-produced Prius cars are due to roll off the assembly lines in two years time.
Prius sales in the United States have been boosted by tax credits for fuel-efficient vehicles.
And some US states allow Prius drivers to zip along restricted carpool lanes, normally reserved for cars carrying several passengers, on busy highways even if they are carrying no other passengers.
Toyota reported 11,765 Prius sales in June, marking a 25 percent drop from a year earlier, but it said limited production volumes had skewed its sale numbers. The car sells for around 21,000 dollars.
The global auto giant is building new plants, the company is constructing another plant in Ontario, Canada, as rival US automakers close plants and cut back assembly operations.
GM announced plans last month to shut four North American truck and SUV plants. The US auto group is meanwhile ramping up production of its own lineup of fuel-efficient vehicles.
Toyota's growing heft was underlined during the first three months of this year when it overtook GM as the world's biggest vehicle maker, although GM executives remain confident they will retain the top spot for the year.
Toyota has not been able to fully insulate itself from the downturn in large vehicle sales hitting the US auto market, the world's largest.
The company also said Thursday that it would temporarily suspend production of its Tundra pickup truck and Sequoia SUV beginning August 8. Production is due to resume in November.
Toyota said affected workers would continue to be provided work.
“By using this downturn as an opportunity to develop team members and improve our operations, we hope to emerge even stronger,” Toyota vice president Jim Wiseman said.
Toyota is moving to consolidate production of the Tundra pickup truck to its San Antonio plant in Texas by next year and plans to halt assembly of the pickup at an Indiana plant.
In a further production update, Toyota said it would now build the Highlander mid-size SUV, originally scheduled to be built in Mississippi, at its Princeton, Indiana plant.
Toyota's North American footprint presently consists of 13 manufacturing plants and over 43,000 employees.
