Toyota recovers in China on small-vehicle sales

Toyota Motor Corp. posted its second consecutive month of double-digit vehicle sales growth in China and could surpass last year's annual sales total, indicating that its troubles in a fast-growing market that has lifted foreign rivals are easing.

Because of a sizable slide in sales earlier this year, Toyota executives had feared that the Japanese auto maker might miss its 2009 goal of matching year-ago sales. But Wednesday, a senior Toyota sales executive said the company may be able to exceed last year's sales level of 585,000 vehicles by a relatively big margin.

The executive said Toyota has stepped up production of cars with smaller engines -- a segment China's central government has been trying to emphasize through a sales tax cut and other measures as it pays greater attention to the nation's fuel consumption. A couple of new cars launched recently have been selling better than expected, while sales declines among bigger, more luxurious cars show signs of bottoming out.

"We think we may be seeing a full-fledged recovery in our China sales," the executive said.

On Wednesday, Toyota said its China sales in June rose 33% from a year earlier to 56,571 vehicles. That followed the 17% growth it posted in May. Toyota's first-half sales totaled about 284,000, unchanged from a year earlier.

Rival General Motors Corp., even as it has dealt with a turbulent U.S., market, has performed strongly in China. Its first-half sales -- which include small vehicles produced by a joint venture in which GM has only a minority stake -- rose 38% from a year earlier to a record 814,442 units. On Wednesday, GM China President Kevin Wale said he expects GM's sales growth in China to exceed 20% this year.