Dec. 15 (Bloomberg) -- Toyota Motor Corp., heading toward its first U.S. annual sales decline in 13 years, indefinitely delayed the opening of a plant in Mississippi that was to begin building the gasoline-electric Prius hatchback by 2010.

The company will halt work after erecting the building structure, which is 90 percent finished, according to a statement today from the automaker. Toyota doesn’t yet know when the $1.3 billion Blue Springs, Mississippi, factory will open, said Barbara McDaniel, a spokeswoman.

A faltering economy and financial crisis that have pushed U.S.-based competitors to the brink of bankruptcy is also eroding demand for cars and trucks at the Toyota City, Japan- based automaker, which last posted a U.S. sales decline in 1995. Toyota’s U.S. deliveries have fallen 13 percent this year through November, and Prius’s dropped 48 percent last month.

“The market is weak for everybody, for all products,” said Jesse Toprak, director of industry analysis for auto- research firm Edmunds.com in Santa Monica, California. “Priuses sold for $5,000 or more over sticker price when gas prices were peaking: Now we see Priuses selling for close to invoice. Toyota doesn’t want to dilute the market further by increasing supply.”

U.S. demand for the most fuel-efficient car on the market had surged as gasoline prices topped $4 a gallon in July. Since then, gasoline has fallen more than 50 percent to $1.66, according to AAA. After peaking at 181,221 in 2007, Prius sales through November are down 9.6 percent to 151,025.

Change of Plans

Toyota, Japan’s largest automaker, said it has already spent about $300 million on site preparation and initial construction. Jobs for about 100 people already hired to work at the plant near Tupelo, Mississippi, are secure, McDaniel said.

The company said in 2007 when the Blue Springs site was announced that it would hire 2,000 workers to produce Highlander sport-utility vehicles there. In July, Toyota changed plans and said it would build the Prius at the factory instead.

The automaker has assembled about 160,000 fewer cars and trucks in North America in 2008 than it did a year earlier. The decline was led by a 15-week suspension at a San Antonio pickup- truck plant and on a line at its Princeton, Indiana, operation.

“It’s a different time for us right now,” McDaniel said in an interview. “It’s the recession. No one really knows how long this will last.”

Honda Motor Co., the second-largest Japanese automaker, said last week it would cut an additional 119,000 units of North American production from its fiscal-year plan. The company also cited weak demand for new vehicles.

The U.S. sales unit of Toyota is based in Torrance, California. Toyota’s American depositary receipts rose $2.50, or 4 percent, to $65.70 at 4:15 p.m. in New York Stock exchange composite trading.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

Last Updated: December 15, 2008 16:35 EST