Toyota cuts vehicle sales forecast as West weakens

By Chang-Ran Kim, Asia autos correspondent

TOKYO (Reuters) - Toyota Motor Corp said it would miss its goal of selling more than 10 million vehicles next year, cutting its forecast by nearly 7 percent due to a severe downturn in Western markets driven by high fuel prices and a credit crunch.

The weaker outlook at the world's most profitable carmaker highlights an increasingly difficult environment for global automakers faced with softening demand in the United States and Western Europe, especially of higher-margin, gas-thirsty vehicles.

Toyota said on Thursday it now expects to sell about 9.7 million vehicles in 2009 with its units Daihatsu Motor Co and Hino Motors Ltd lowering the figure from 10.4 million.

The revision was slightly lower than the 9.8 million analysts had expected following local media reports and after the company trimmed its sales projection for this year, calling for growth of just 1 percent from 2007 to 9.5 million units.

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 biggest auto market.

But rocketing fuel prices in the past year have scared consumers away from such vehicles, forcing virtually every brand to idle or slow down production of pickup trucks 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 its 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 cost 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.

Toyota's shares were down 0.6 percent after the news, underperforming the main Nikkei average which was flat. Toyota shares have fallen about 21 percent so far this year, in line with the transport equipment subindex.

($1=109.42 Yen)

(Editing by Lincoln Feast)

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