Toyota's bright spot

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MARCO WERMAN: I'm Marco Werman, and this is The World. It's been a dismal year for automakers around the world. But one company is experiencing a bit of a comeback. Toyota announced today it's received 180,000 orders for the latest version of the Prius hybrid. That's since May, when the new Prius came out in Japan. Toyota says it has a five-month waiting list for the fuel-efficient car. And the company hopes sales will be even stronger in the US. Workers at the Prius plant in Toyota City are working overtime to meet demand. Akiko Fujita recently took a tour, and sent this report.

AKIKO FUJITA: Toyota's Tsutsumi plant feels more like a bustling city than a car factory. Partly made Priuses create a traffic jam along the assembly lines. Workers rush to attach parts to the car's frame. At the welding shop across the way, dozens of tall robots stamp out new metal doors and roofs. This plant is roughly the size of 30 baseball fields. And company spokesman Paul Nolasco says you'd be hard pressed to find a quiet corner.

PAUL NOLASCO: The Prius plant is working pretty much near full tilt. We're doing whatever we can to meet demand.

FUJITA: Tsutsumi is one of only 2 plants in the world that produces Toyota's Prius hybrid. Workers here have been in overdrive since the company released its 3rd generation Prius last month. Demand has been so high, Toyota had to pull workers from other factories to keep up with orders.

NOLASCO: Right now, actually, at the plant that produces the Prius on the assembly side, we have about 4,400 team members. About 30 percent of the workers have come from other facilities.

FUJITA: It's a big turnaround from the mood earlier this year, when the company reported its worst annual loss in history. Japanese tax breaks have been a driving force behind the demand for the new Prius. In April, the government began waiving taxes for all hybrid cars � in part to boost the country's struggling carmakers. Honda's new Insight became the first hybrid to top domestic car sales in Japan that month, only to be toppled by the more expensive Prius in May. But auto analyst Andrew Phillips, with KBC Securities in Japan, argues those tax breaks alone aren't responsible for Toyota's recent turnaround. He says Toyota's finally hit its stride after more than a decade spent trying to perfect its hybrid technology.

ANDREW PHILLIPS: On this 3rd generation, reducing the costs and also further enhancing the performance of the vehicle were the key issues. That's why it's been getting better, turning it into perhaps more of a mainstream product.

FUJITA: Toyota's marketing the latest Prius as a family-friendly car, not just an environmentally friendly one. Its starting price is also about $2,000 dollars cheaper than the 2nd generation Prius. Nolasco describes it as a car designed to take ordinary people to the mall�. And he's confident that will appeal to American consumers as well. But analyst Andrew Phillips says the hybrid car alone won't pull Toyota out of its $4 billion dollar financial hole. The company's already announced it's expecting more red ink next year.

PHILLIPS: It's not a particularly high-end vehicle. I mean, it's a relatively small vehicle, and in the auto industry, smaller vehicles have smaller margins. So something of a Prius class vehicle is never going to have particularly high margins.

FUJITA: Still, Phillips says all the buzz around the new Prius does bring consumers back to dealerships, and that's a good thing for any car company. Japanese rivals Nissan, Subaru, and Mitsubishi are all hoping for the same kind of attention when they roll out their all-electric cars in the next 2 years. Toyota also plans to release an Electric vehicle 3 years from now. But for now, Nolasco says, hybrid technology will remain at the core of Toyota's green car lineup. And that means this Tsutsumi plant could be humming for years to come. For The World, I'm Akiko Fujita in Toyota City, Japan.