Toyota delays opening of U.S. SUV plant

By Tom Stundza -- Purchasing, 5/14/2008 9:48:00 AM

Japan’s Toyota Motor has decided to delay the launch of its sport-utility vehicle plant in Mississippi by about half a year and ramp up production more slowly than it had planned. A spokesman tells the media that the plant near Tupelo, Miss., now is to begin producing the Highland car-SUV crossover in May 2010, about half a year later than planned. Also, when Toyota's Tupelo plant begins production, it will start with an annual capacity of 120,000 vehicles a year instead of the 150,000-a-year Toyota had planned.

Toyota's move “stems from a weaker-than-expected overall economy outlook stemming from [factors] including high fuel prices,” the spokesman says, citing a deep downturn in auto sales in the U.S., caused by the slumping economy, declining home values and high gas prices. Automakers have capacity to produce 17.4 million vehicles annually in North America, according to Harbour Consulting, a research company. However, because of the sales slump, car makers expect to build only about 14 million cars in North America this year.