A uncertain economic future and flagging US sales has caused Toyota to indefinitely postpone completion of its Mississippi-based production facility. This means that the new generation Prius will not be assembled on US soil as was intended and will instead be imported from Japan.
Falling fuel prices and a substantial drop in US Prius sales - 8660 vehicles were sold in November '08, down from the 16,737 sales in November '07 - are only part of the equation. Toyota is also mindful of potential over-supply issues that may arise from introduction of the Honda Insight when it arrives early next year.
Long-term, Toyota plans to build the Prius in the US, though any such move will largely depend on the health of the North American market.
While the extra taxes and costs incurred by importing the Prius will be unwelcome, the capital required to forge ahead with expansion plans in Mississippi is money Toyota simply doesn't wish to commit at this stage. Toyota is not alone in shelving plans till things improve; carmakers everywhere have suddenly become very risk-averse.