Toyota to Delay Opening of Plant in Mississippi

Dec. 16, 2008
Will delay other large capital investments as well

Toyota Motor Corp. will postpone large capital investments and eliminate executive bonuses due to the worldwide slump in auto sales and the yen's continued appreciation.

It will delay the opening of a plant under construction in the southern US state of Mississippi until 2011 or later, Japan's Nikkei business daily reported.

Toyota will also suspend a plan to increase production capacity in Brazil and India as well as in the Japanese city of Takaoka, the Nikkei said.

The moves come amid speculation that it will report a $1.1 billion loss for the second half of the year to March, its first interim operating loss since introducing U.S. accounting standards in 1999.

Japan's Nikkei business daily reported the company will freeze its plan to boost annual production capacity at one of its factories in China by 50% to 150,000 units by the end of 2009.

The postponements by Toyota are likely to hurt parts suppliers and car materials makers, and other automakers could follow its lead in cutting capital spending, the Nikkei said.

The auto giant's plan to eliminate bonuses for its executives this fiscal year will save about one billion yen, the Mainichi Shimbun daily and Kyodo News reported.

Copyright Agence France-Presse, 2008

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