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Toyota maintains global sales target

Toyota is holding unchanged its global sales target of 9.34 million vehicles for this year despite worries about plant closures and a sluggish market in Japan, the company president said Monday.
Japan Toyota
Toyota Motor Corp. President Katsuaki Watanabe said he has not plans to change sales targets for the company, which is enjoying booming sales.Koji Sasahara / AP
/ Source: The Associated Press

Toyota is holding unchanged its global sales target of 9.34 million vehicles for this year despite worries about plant closures and a sluggish market in Japan, the company president said Monday.

Toyota Motor Corp., which this year for the first time ever beat General Motors Corp. as the world's No. 1 automaker in global vehicle sales for the first half of the year, set that target late last year.

President Katsuaki Watanabe told reporters he was holding that number unchanged so far, although reviews were underway for all the regions.

"At this time, we have no plans to change them," he said at a Tokyo hotel.

Toyota's booming sales come at a time when it is seeing sales grow in the U.S. and other global markets.

Soaring gas prices have made Toyota's fuel-efficient models popular, including its hybrid Prius and small cars Corolla, Camry and Vitz, also known as the Yaris.

Toyota's plants were shut after a July 16 earthquake in north-central Japan, which damaged key parts-maker Riken Corp. The company said Monday 20 of its 31 assembly lines in Japan will be up by Tuesday.

The closure has cost Toyota production of about 46,000 vehicles, and that number is expected to climb to about 55,000 overall, about 60 percent of them exports, Watanabe said. The automaker plans to catch up later this year on the lost production, he said.

Koji Endo, auto analyst with Credit Suisse in Tokyo, said those vehicles amount to about three days of production, which can be easily made up on a weekend. Overall, sales growth in North America, Russia, China and Europe is more than likely to make up for declines in Japan and Asia, and Toyota is likely to surpass its target, he said.

"Toyota has set a conservative target," Endo said. "There is hardly any negative impact from the earthquake."

Outlining the company's midyear strategy, Watanabe said Toyota will contribute more to efforts against global warming and pollution by working on new technologies, including plug-in hybrids.

Other automakers, including GM, are working on developing plug-in hybrids, which have batteries that power an electric motor, with an internal combustion engine for use when the batteries run low. The batteries can be recharged by plugging them into a standard wall outlet.

More common hybrids already in mass production, such as the Prius, switch between an electric motor and gas engine to deliver better mileage. They don't need to be plugged in to recharge because they recharge the motor as they run, converting the energy from the wheels and braking.

Toyota said in June sales of its hybrid cars had passed 1 million vehicles, a landmark for the automaker that started selling the Prius a decade ago and now dominates the hybrid market.

Toyota's 2007 global sales target marks a 6 percent rise from 8.8 million vehicles in 2006, and would be the ninth straight year of global sales growth for Toyota.

GM does not give forecasts for full year auto production or sales. The Detroit-based automaker and its affiliates sold 9.1 million vehicles worldwide in 2006.

Watanabe brushed off a question about the prospects of becoming No. 1.

"We must be thankful many customers are choosing to buy our products. Being No. 1 is a result of that," he said.

Toyota will continue to work to become a good corporate citizen in the U.S. and follow its principle of producing cars where they're sold, he said. Toyota has a new plant in Mississippi set to start production by 2010.

Analysts say Toyota may beat GM in global vehicle sales and production for the full year as soon as this year, robbing GM of the title it has held for seven decades.

In the first quarter, Toyota sold more cars and trucks around the world than GM for the first time ever, but Toyota's worldwide sales in the April-June quarter fell below GM's.

Toyota has long beaten GM in profitability, raking in record profits every year, although it expects slower profit growth this year, compared to recent years.

GM has been struggling to cut costs and turn around its business. GM has been in the black for the last two quarters, but lost about US$2 billion last year.

Watanabe acknowledged the Japanese market was tough, but said new models were being well received in the Japanese market in recent weeks.

As part of an effort to woo buyers, side airbags and curtain-shield airbags will be offered as standard features on upcoming new models going on sale in Japan, he said.

Watanabe said Toyota will upgrade quality controls in development, production and sales. Toyota has been working to improve quality controls in the past year following a surge in recalls.