Toyota cuts sales forecast as demand sputters

Toyota Motor Corp, the world's most profitable carmaker, cut its 2009 vehicle sales forecast by nearly 7% due to a severe downturn in Western markets driven by high fuel prices and a credit crunch.
The weaker outlook highlights an increasingly difficult environment for global automakers faced with softening demand in the United States and Western Europe, especially for higher-margin, gas-thirsty vehicles.
Toyota said on Thursday it expects to sell about 9.7 million vehicles next year including its Daihatsu Motor Co and Hino Motors Ltd units. It had previously forecast sales of 10.4 million vehicles. No car maker has yet passed the 10 million annual unit sales milestone.
"We are looking at the current shift towards fuel-efficient cars (in the United States) as a structural change in demand," Toyota President Katsuaki Watanabe told a news conference. "We intend to respond quickly and flexibly to this environment."
The revised forecast was slightly lower than the 9.8 million analysts had expected. Toyota last month trimmed its 2008 sales projection, seeing growth of just 1% to 9.5 million units.
Toyota lowered its 2009 sales forecast for North America, the world's biggest auto market, to 2.7 million vehicles from 3 million. Toyota has dropped Mexico from its definition of North America.
Toyota shares eased 0.2% in a virtually flat Nikkei average. The stock has fallen about 21% so far this year, in line with Tokyo's transport equipment subindex.
"For the last few months the company began to say its previous target was impossible and they've scaled back gradually, so everybody's used to the idea," said Nagayuki Yamagishi, strategist at Mitsubishi UFJ Securities.
"Everyone just thinks 'it can't be helped"'
A year ago, at its previous business strategy briefing, Toyota declared a successful entry into the full-sized pickup truck segment in the United States with the Titan — a model it had billed its most important ever in the world's top market.
But rocketing fuel prices have scared consumers away, forcing automakers to idle or slow production of pickups and sports utility vehicles (SUVs) in North America.
Toyota is suspending U.S. production of light trucks for three months to prevent inventory from ballooning.
Tougher times at U.S. rivals, however, are likely to keep Toyota ahead of General Motors Corp as the world's biggest automaker this year.
To respond to changing consumer needs, Toyota outlined plans last month to build the hot-selling Prius gasoline-electric hybrid at a factory under construction in Mississippi instead of the planned Highlander SUV from 2010.
Toyota will also hope to bounce back next year with the launch of a third-generation Prius and a new hybrid model to meet growing demand for fuel-efficient vehicles.
Industry watchers are also eagerly awaiting a low-cost car, expected to sell for under 1 million yen ($9,000), that Toyota is developing to compete in emerging markets such as India and Brazil. Production in India is set to begin in 2010, and in Brazil a year later.