Japanese automaker Toyota Motor Corp. is planning a revamp of the North American market by adapting its car models to the latest tendency in gasoline prices, the Nikkei online journal reported on Tuesday.

That means less fuel-efficient models will be replaced by hybrids, according to sources close to the company. The car maker has reportedly given up on its plans to produce Highlander sports utility vehicles at a Mississippi factory, scheduled for 2010.

This will open a new path for Toyota Prius, which became the best-selling gas-electric hybrid car in the United States last year. In October last year, Toyota decided to increase availability of its Prius model as concerns over high fuel prices increased.

As the general acceptance for the hybrid technology has grown extensively in recent years, Toyota is planning on extending the availability of the Prius model in the United States. In addition to that, the automaker is also expected to focus its Tundra pick up truck production to a single site, in San Antonio.

The Indiana factory, which currently produces the Tundra and Sequoia SUV will start its production of Highlander, once the Tundra production is restricted to San Antonio, sources familiar with the matter said. The company did not comment on any of the rumors.

Toyota is currently facing a problem that other car manufacturers have confronted as well: as gasoline prices increase, the demand for gas-guzzling vehicles decreases, as well as sales figures.

On the other hand however, Toyota is struggling with an increasing demand for its Prius model, which delivers the best fuel efficiency rating and is optimized for maximum experience in the crowded urban environments.

The fuel-efficiency/ performance of Prius puts Toyota in the position of increasing production, although the number of Prius vehicles to be produced remains unknown. Unlike other automakers, Toyota could easily manage to face the slump in the U.S. market, just by working a little on its production plans.