Toyota May Need to Make Hybrid in U.S. Facility

SAN FRANCISCO February 15, 2004; Dow Jones reported that Toyota Motor Corp. President Fujio Cho said the No. 1 Japanese auto maker, encouraged by strong sales of its gasoline-electric hybrid cars, may eventually manufacture a hybrid model in the U.S., Monday's Wall Street Journal reported.

The redesigned second-generation Prius car, which has more power and room than its predecessor, has become a hot seller since Toyota launched the Japan-made vehicle in the U.S. late last year. "I would say we have to think about building a hybrid in America eventually," Mr. Cho said late last week in San Francisco.

He added, however, that there are no active plans and there would be several major hurdles to overcome even if Toyota decided to manufacture a gas-electric hybrid in the U.S. The biggest, Mr. Cho said, would be how to source a host of " very unusual" components and materials in a hybrid's drive system, such as electric motors and large batteries.

No one in the U.S. makes many of those components, and Toyota would have to import them from Japan to start building a hybrid vehicle in America. "It may not make any business sense at all if we brought in too many of those big components from overseas," Mr. Cho said. The Toyota president also said sales of a hybrid would have to hit at least 50,000 to 100,000 vehicles a year to justify production out of Japan.