Toyota delays Mississippi assembly plant

There are also signs that Toyota is starting to feel the slowdown in sales globally as demand in emerging markets like China, India and Latin America weaken. Toyota last month slashed its profit forecast for the fiscal year that ends in March to 550 billion yen ($5.9 billion), one-third of its previous year’s earnings.

David Rumbarger, president of the Community Development Foundation, a northeast Mississippi development group that helped lure Toyota to the state, said he’s disappointed with Toyota’s decision to delay the plant but understands it, given the industry’s flagging sales.

“Obviously, in these economic times we need every job we can get, but we’re patient,” he said.

Seven suppliers have announced plans to open near the Toyota plant in Mississippi. Rumbarger said each will evaluate its own business plan and decide when to open.

Toyota first announced plans for the Mississippi plant in 2007 and said it would make Highlander SUVs, but the company said this summer it would build the Prius there instead. Back then, Toyota couldn’t keep up with demand for the hybrid, which gets 46 miles per gallon on average and remains the highest-mileage passenger car on the U.S. market, according to the Environmental Protection Agency.

The plant, northwest of Tupelo, Miss., was initially to be up and running in late 2009 or early 2010, but Toyota pushed the date back to mid-2010 after seeing signs of a slowdown in the U.S. auto market earlier this year.

Toyota has made other cutbacks recently to adapt to declining vehicle demand. Last week, the automaker announced production cuts at factories in Indiana, Kentucky and Canada, on top of other reductions in November, when Toyota also cut several hundred contract workers.

The company has 14 manufacturing facilities in North America, including one in California that is a joint-venture with General Motors Corp.

Toyota isn’t the only foreign automaker with plans to expand in the U.S. Volkswagen AG said in July that that it would build its first U.S. assembly plant in Chattanooga, Tenn.

VW officials have said they are sticking with their plans for the plant to begin making cars in 2011 because that’s is a critical part of its goal to boost sales in the U.S. to 1 million a year by 2018, or more than four times the number sold last year.

Kia Motors Corp. also plans to open an assembly plant at West Point, Ga., in 2009.

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