NAGOYA -- Falling oil prices have prompted consumers in North
America to buy gas guzzlers instead of the fuel-efficient Prius
hybrid car, forcing Toyota Motor Corp. (TM, 7203.TO) to reduce
overall vehicle production in Japan, The Nikkei reported in its
Wednesday edition.
The automaker had initially planned to churn out about 13,000
vehicles at domestic plants every business day but recently
notified suppliers that daily output will drop by about 500 in
January. Domestic production in the quarter to March will
undershoot the earlier plan by around 20,000 units.
Most of the reduction will be at the Tsutsumi plant, a facility
outside Nagoya that builds nearly all Priuses sold in Japan and
abroad.
Fuel economy is the biggest draw of the Prius, which is powered
by an electric motor and a gasoline engine. But since crude prices
began falling this summer, the model's sales in North America have
missed year-earlier figures by 10%-20%.
West Texas Intermediate crude oil stood at $69 a barrel Monday,
down about 40% from the $107 year-to-date peak marked June 20.
Prices have remained at low levels not seen since 2010.
As consumers in North America gravitate toward large vehicles,
Toyota will boost production of the Tacoma pickup truck by
increasing shifts at Mexican facilities from two to three in
April.
Toyota's sales in the key North American market rose 6% on the
year to 2.15 million units for the January-October period. Many of
the larger models are made there, while hybrids are built in Japan.
The shift from environmentally friendly cars to large vehicles in
North America thus hurts domestic output.
Toyota might miss its Japanese production target of 3.2 million
vehicles this fiscal year on weak hybrid exports to North America
and slumping consumer spending at home following the April 1
consumption tax hike. But the company is still expected to churn
out at least 3 million units -- which it considers the minimum to
maintain employment at domestic plants -- thanks to brisk exports
to Asia and elsewhere.