DETROIT Toyota Motor Corp (7203.T) on Monday
said it would delay the start of production in a new
Mississippi plant, the latest sign that the world's largest
automaker is struggling with the slump in the U.S. auto sales.
Toyota now plans to start production at its plant under
construction near Tupelo, Mississippi in May 2010, about five
months later than initially planned.
In addition, Toyota will start at a production volume of
120,000 vehicles, just 80 percent of capacity, a spokesman for
the automaker's U.S. manufacturing company said.
Toyota announced plans to build a $1.3-billion plant
assembly plant in early 2007. The assembly plant, which is
expected to employ some 2,000 workers, will build Toyota's
Highlander crossover utility vehicle.
Victor Vanov, a spokesman for Toyota Motor Engineering and
Manufacturing North America, said the automaker had adjusted
its initial plans for the Mississippi plant in response to the
weaker U.S. vehicle market.
But by delaying the start of production, the Tupelo plant
also will be able to start with a revamped version of
Highlander due in 2010 and avoid the expense of making tooling
changes soon after the start of operations, Vanov said.
"It just made sense to start with the new product," he
U.S. sales of the Highlander were up 4 percent through the
first four months of the year, although Toyota's overall sales
have dropped by 4 percent over the same period.
Last week, Toyota forecast its first annual net profit
decline in seven years, citing the drag from a stronger yen,
rising materials prices and the slowing U.S. economy.
In response, Toyota executives have said the automaker has
set aside more cash for consumer incentives to support sales of
sport-utility vehicles and pickup trucks, an area of the market
that has been especially weak because of rising gas prices.
Toyota also has production of its Tundra pickup trucks at
its San Antonio, Texas plant and its Sequoia SUV at its
Princeton, Indiana plant.
With just over 16 percent market share, Toyota now ranks as
the No. 2 automaker in the U.S. market, ahead of both Ford
Motor Co (F.N) and Chrysler LLC and behind only General Motors
Toyota already is recruiting skilled workers, including
tool and die engineers, for the Mississippi plant, Vanov said.
The company now plans to begin hiring assembly line workers in
early 2009, he said.
"We had originally planned on doing that later this year,"