toyota cuts 2009 sales forecast on lower usa demand
28 August 2008

The company aims to sell 9.7 million vehicles worldwide next year, compared with an earlier estimate of 10.4 million, it said in a statement today. This year's sales are expected to total 9.5 million, according to an earlier forecast.  Toyota has halted production of Sequoia sport-utility vehicles and Tundra pickups in the U.S. for three months as a 34 percent jump in gasoline prices threatens to push industrywide vehicle sales to a 15-year low. Toyota President Katsuaki Watanabe is betting on expansion in India, China and Brazil to offset sagging demand in North America and Europe.

``The operating environment is getting tougher, that's for sure,'' said Edwin Merner, who oversees $2 billion as president of Atlantis Investment Research Corp. in Tokyo. ``Those numbers are fairly realistic.''  Toyota cut its 2009 North American sales forecast to 2.7 million vehicles from its previous estimate of 3 million. Sales in Japan may total 2.25 million units, down from its previous estimate of 2.4 million. In Europe, the carmaker cut its estimate to 1.3 million units from 1.45 million.

The forecast includes its Daihatsu Motor Co. and Hino Motors Ltd. subsidiaries. The two companies' sales account for about 10 percent of the Toyota's estimate. Toyota closed unchanged at 4,770 yen at the 3 p.m. close of trading on the Tokyo Stock Exchange. The stock has fallen 28 percent in the past year.  The company's U.S. light-truck sales slipped 15 percent in the first seven months of this year, triggering the Sequoia and Tundra production halt that will last until November.

Responding to a shift in U.S. demand for fuel-efficient cars, Toyota also plans to build Prius gasoline-electric hybrid cars in the country from 2010.  The move will ease production constraints on the Prius that have left U.S. dealers with shortages of the car and an oversupply of its biggest trucks. Toyota mainly builds the model in Japan. General Motors Corp., the world's biggest automaker, is also reorganizing its production to reflect plunging vehicle sales in the U.S. GM's U.S. vehicle sales this year through July fell 18 percent. Toyota's fell 7.6 percent. Full-year industrywide sales may drop to 14.2 million, the lowest since 1993, according to J.D. Power & Associates.

Toyota, which expects to make and sell 1 million vehicles a year in China early in next decade, plans to more than double capacity at its factory in Chengdu by the first half of 2010.  Watanabe today said he plans to boost Toyota and Lexus dealerships in China to 850 outlets in 2010 from 500 in 2008. Dealers in Russia will jump to 148 from 72 in 2007, he said. ``Toyota will come out from its doldrums,'' said Hitoshi Yamamoto, chief executive officer of Tokyo-based Fortis Asset Management Japan Co., which manages $5.5 billion in Japanese equities. ``The company is shifting its gears to new markets, because they are now leading the global economy.''

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Tetsuya Komatsu in Tokyo at tekomatsu@bloomberg.net

Naoko Fujimura and Tetsuya Komatsu,  www.bloomberg.com