General Motors will drop the Corolla-based Chevrolet Prizm compact sedan range
built at its California joint-venture factory with Toyota and begin producing
a new Pontiac for the US and Japan, a plant executive told Bloomberg News.

The New United Motor Manufacturing factory in Fremont will stop building the
Prizm after the 2002 model year to begin producing the Pontiac and a new model
Toyota Corolla, Bloomberg said, quoting John Mufich, general manager of information
management at NUMMI.

The world’s biggest carmaker makes about 45,000 Prizms each year at the factory
and Chevrolet spokesman Tom Pyden told Bloomberg that the automaker hasn’t announced
the discontinuation of the Prizm.

"Sales are going very well and it’s in our product plan through at least
the 2002 model year,” Pyden reportedly said. Prizm sales rose 12% to 44,749
in the first 10 months of this year.

The new Pontiac will be a small "lifestyle vehicle” that will be built
in both left- and right-side steering versions to accommodate drivers in both
Japan and the US, Mufich said.

The Pontiac and Corolla would be built on the same assembly line and would
likely have a similar platform, Mufich said. Pontiac spokesman Johannes Reifenrath
wouldn’t confirm the plans.

"We have sent out some teaser information on a new Pontiac vehicle,”
Reifenrath said. "We have not released the name of the vehicle. We have
not made any statement on where or when this vehicle will be built.”

Toyota US spokesman Sam Butto told Bloomberg the company would have a product
announcement at the Detroit Auto Show in January.

Toyota Tokyo spokesman Paul Nolasco said the company "doesn’t comment
on future plans.”

Bloomberg noted that General Motors last March stopped building a right-hand
drive version of its Chevrolet Cavalier model that Toyota sold under its own
brand in Japan because sales were less than the companies had expected.

Toyota said in March that it was considering replacing the Cavalier with another
"more popular” model, according to executive vice president Kosuke Yamamoto
in an interview.

Models such as the Cavalier and GM’s Saturn brand, which are popular in the
US, don’t always become top-sellers in Japan, he said in March, noting that
Toyota’s Camry, the highest-selling sedan in the US, isn’t nearly as popular
with Japanese car buyers.

Japan’s biggest automaker had sold the Cavaliers, rebadged as Toyotas, since
1996. It sold only 36,228 of the cars in the more than three years they were
marketed through Toyota’s dealers in Japan. The companies had hoped to sell
20,000 a year.

Ironically, the Toyota Cavalier has subsequently proved popular as a used car
buy in New Zealand, a right-hand-drive market that imports thousands of second-hand
cars from Japan.

Bloomberg News said that even though US-made cars aren’t so popular in Japan,
Toyota hopes to sell another GM car, because "it can gain advantages in
distribution and other areas in the US market,” quoting Yoshio Inamura, a fund
manager at Tokyo-Mitsubishi Asset Management. "Toyota is so good at establishing
strategies like this one.”

Many of the Cavaliers failed to meet Toyota’s tough quality standards for cars
sold in Japan, Mufich said.

NUMMI will have in place stringent quality testing so the Pontiacs would more
likely be accepted in the Japanese market, Mufich said. Still, it could be difficult
to sell a Pontiac to Japanese buyers who believe Japanese cars are better than
those made in the US, he said.

Toyota started production at NUMMI in 1984 under an equal partnership with
GM. The Japanese company currently builds Corollas and Tacoma pickup trucks
at the plant.