What with all of the talk about new hybrid and electric vehicles, one would think that the global leader in bringing hybrid vehicles to market would be busting down the doors to build a North American assembly plant, but that appears not to be the case.

Toyota Motor Corp. has announced that it will postpone plans to build its Prius hybrid passenger car in the U.S., perhaps by as much as six years.  This is the second time Toyota has postponed U.S. assembly of the Prius.  In 2008, during a period of rapidly rising gasoline prices, the Prius was sold out and Toyota decided to build the popular hybrid at a plant in Tupelo, Miss., where construction was already underway for an assembly plant to build the mid-size Highlander SUV.  But as the economic recession worsened, Toyota halted completion of the plant leaving an empty shell of a building.  Under pressure from the Mississippi legislature that had invested money in the facility, Toyota announced in June that it would proceed with completion of the plant but this time it was the Corolla model that would be assembled at Tupelo, not the Prius.

Yesterday, Toyota Executive v-p Atsushi Niimi told Reuters news service that plans to build the Prius in the U.S. have been put on hold indefinitely and would likely only go forward when the hybrid was remodeled.  The decision leads to a bit of head scratching prompted by thoughts that perhaps Toyota is developing an entirely new EV to replace the Prius or perhaps the company is concerned about moving too quickly in light of the quality issues it has faced over the last several months and the numerous recalls the company has been forced to make. 

Mr. Niimi told Reuters, "The main components for the Prius such as the motor and battery are not mature enough for local production.  We expect that they'll be ready with the next remodeling." 

In the meantime, Toyota faces growing competition in the hybrid vehicle market and it may be looking for a way to remain a leader.  Niimi cited the slow economic recovery in the U.S. as being a factor in the decision, stating, "If you look at unemployment, housing, and other economic indicators there's not much good news.  I think it will take time for the market to recover."  Most industry executives agree with that statement, but also acknowledge that the hybrid and electric vehicle markets are expected to grow at a faster pace than other automotive markets in the U.S.

Toyota plans to build an electric version of its RAV4 SUV with EV maker Tesla Motors at the former NUMMI (New United Motor Manufacturing Inc.) plant in California, and production of the Corolla is targeted to begin sometime next year at Tupelo.  The company said that at this time, it had no plans for a Prius assembly plant in North America or where it might be located.  And after the grilling company executives received from U.S. government officials - some deserved, some not - Toyota may decide to employ Canadians or Mexicans, before employing more Americans.