Toyota and Isuzu Bail Out on Joint Diesel Engine Project

It would seem that Toyota slips even more in the economic drought and is forced to shut down projects all over the globe. The development of the 1.6 liter diesel engine in a joint operation with truck maker Isuzu Motors Ltd has been suspended due uncertain vehicle demand and lack of funds.

"A decision was made early this month to suspend the project," a Toyota spokesman was quoted as saying by Reuters. Toyota and Isuzu had planned to start producing the engines and install them in European models starting from 2012.

The solution now for a company like Toyota is to revise all projects and find an efficient way to reduce costs and thus make the business more profitable, something almost every automaker in the world seems to be looking for.

As announced earlier today, Toyota is no longer interested in building the Prius hybrid in the United States due to the decreasing petrol prices which obviously reduced demand for battery-powered cars. Basically, the US Prius manufactured at the Tupelo, Miss. production facility was discontinued due to the decreasing demand for hybrid vehicles which, in turn, was caused by the descending trend the gasoline prices adopted since summer.

Toyota's Prius sold pretty well in 2007 and the first months of 2008, with more than 16,500 units delivered last year. However, sales were almost halved this year, with 8,660 Prius models delivered in the United States, mostly due to the decreasing gasoline prices.