Asia markets key to Toyota's 10 mil. sales goal

Toyota Motor Corp.'s sales plan that envisions the company becoming the world's first automaker to sell more than 10 million cars annually across the globe shows the carmaker's determination to establish itself as the world's largest.

Under the plan announced Friday, Toyota plans to increase sales everywhere it operates. The company aims to increase sales in Asia by an ambitious 60 percent in the coming three years.

However, Japan's domestic car market has been sluggish and there are fears the United States, the world's largest automobile market, will experience an economic slowdown. As such, reaching the target will not be a given.

To achieve its goal of selling 10.4 million cars in 2009, the key will be whether Toyota will be able to gain a good market share in China, which is expected to grow into a pillar of the wider Asian market.

At a press conference Friday in Tokyo, Toyota President Katsuaki Watanabe spoke of his determination to see Toyota become the biggest player in the industry, but said the company must keep its feet on the ground. "We'll make efforts to achieve this lofty goal, while cautioning ourselves not to become conceited or arrogant," he said.

Toyota, which will mark its 70th anniversary in November, has quickly become the nation's biggest carmaker with strong sales networks and expanded exports.

But Toyota's expansion only took off since the 1970s, when the company was buffeted by trade friction and the yen's appreciation, and embarked upon a strategy to expand overseas production.

In 1984, Toyota started local production in the United States with a joint venture with General Motors Corp. Since then, Toyota has opened plants in European and other Asian countries.

Toyota has grown into a global company, with 52 production bases in 25 countries and one territory as of the end of April.

In 1997, Toyota launched the Prius, the world's first mass-produced hybrid car model, which has proved popular in many countries. Since 2002, Toyota's sales have increased by 600,000 to 700,000 units every year.

Reaching the 10.4 million unit target by 2009 would represent a jump of 5 million vehicles in a decade.

Watanabe predicted the goal will be achieved mainly by growth in emerging markets. Due to growing demand in China, India and Russia, the number of cars in use worldwide is predicted to rise from 850 million units in 2005 to 1 billion in 2010.

Toyota hopes to tap the increased demand by expanding local production in emerging markets. Asian markets will be especially important for Toyota's goal. In China, Toyota plans to increase sales from about 300,000 units in 2006 to the 1 million level in the early 2010s.

Toyota aims to beef up Chinese sales promotions for its mainstream sedans, such as Camry and Corolla, and to further expand local production.

In Brazil, Toyota plans to increase sales of Corolla models that run on bio-ethanol fuel. In Russia, local production of Camry models will begin late this year and sales networks will be strengthened.

In emerging markets such as India and Brazil, Toyota plans to speed up development and local production of low-priced models seen as being the key to success.

In North America, production of the Tundra pickup truck will go into full gear at Toyota's plant in Texas that opened in November last year. In autumn next year, its second plant in Canada will begin producing sport-utility vehicles.

In European markets, Toyota will strengthen sales promotions for strategic models, such as Yaris (named Vitz in Japan) and Auris, the top model there. The company also plans to increase production of diesel-engine models, as more than half of new cars sold in Europe are diesel-powered.

To counter European carmakers' moves to promote their diesel engines, Toyota will beef up development of new engines in conjunction with Isuzu Motors Ltd., with which the company has equity ties.

However, some skeptics wonder whether the goal can be achieved.

In China, which likely will become a main battlefield for global automakers, numerous companies have entered and competition has been intensifying.

In India, Toyota lags behind some makers, including domestic rival Suzuki Motor Corp. It is uncertain whether as latecomers, Toyota products can be popular in the country.

Also in North America, U.S. and European makers can be expected to counter Toyota's hybrid cars with their own diesel-powered models.

The U.S. economy has shown signs of slowing after years of expansion, partly because of a problem with subprime loans, housing loans for low-income earners.

Toyota predicted the size of the domestic market will be unchanged, but the new car market is shrinking as a whole due to decline in the nation's birthrate.

As automakers' international competitiveness is said to be underpinned by their home country markets, the shrinking Japanese market may hinder Toyota's growth strategy.