Hybrid Car Review

Toyota had planned on building the Toyota Prius here in the US at the Blue Springs, Miss plant. But when the recession hit, the plans were halted as sales for vehicles worldwide plunged.

But with the yen near 'historic highs,' 88 yen per dollar, it's more expensive than ever to export cars from Japan to the US. That means it makes more sense to build the Prius here in the US. Which means Toyota is still looking at opening that plant up (Source: Toyota begins Highlander production in Indiana | detnews.com | The Detroit News)

I was thinking about the plant in Mississippi this morning. The possibility of new plants from GreenTech and Hybrid Kinetic plus the heavy demand for the Prius in Japan, and here, means the Prius is in short supply and will be for the next year.

The days supply for the Prius is down to five days. Mostly that's because sales are being diverted to Japan. When they are a year away from filling orders, something has to give.

Does that mean Toyota should open up the plant here in the US, just to ease the supply problem? Probably not, although I don't see the demand in the US going down in the next year.  In fact, I would expect an increase in demand as the economy recovers.

I do anticipate a big drop in the demand in Japan after the incentive program from the government ends next year. And it's unclear how soon production would begin here in the US, even if they started doing it today. I know that a lot of the work was already done.

But either way, the issues I was thinking about are short term. But the yen to dollar ratio might be a long term issue that Toyota really needs to consider. So, I'm betting Toyota will be opening up Prius production in the US. All it needs is some clear indication the worldwide recession is truly easing out leading to the recovery in car sales in the US.