Toyota maintains sales target in US despite weaker demand due to credit crisis

Toyota maintains sales target in US despite weaker demand due to credit crisis

	Published : Thu, 30 Aug 2007 09:47 By : Agencies Print this Story

TOKYO (Thomson Financial) - Toyota Motor Corp is sticking to its sales growth target in the US despite the likelihood of slowing demand as a consequence of the US subprime credit crisis, a top official of the Japanese automaker said Thursday.

The world's second-largest carmaker said it is keeping its target of a 5.4 percent growth in US sales despite weaker demand.

Toyota aims to sell 2.68 million vehicles in the US in 2007, up from 2.54 million units in 2006.

'We now expect the US car market to shrink slightly this year compared with the year ago while Toyota continues to strive to meet its initial target. Toyota has been outperforming the market by a modest margin,' Toyota Motor president Katsuaki Watanabe told a news conference.

Toyota had earlier forecast that demand for cars this year in the US, the world's largest car market, would be around the same level as a year ago.

'Subprime loan problems apparently played a key role in causing the drop in US car sales below their year-ago level in July. The Fed's quick action seems to have limited further impact of the subprime problem,' he said, referring to the Fed's discount rate cut earlier this month.

'However, we cannot be optimistic about the outlook as we still need to monitor carefully how recent volatility in foreign exchange rates and stock prices might affect the economy,' Watanabe said.

On sales in Japan where demand has also been sluggish, he said the company is targeting as much as a 3 percent growth in volume terms in August and another year-on-year growth in September.

In July, Toyota's sales in Japan fell 7.7 percent from the year before to 134,997 units, as the July 16 earthquake in central Japan froze the operations of a major supplier of engine parts, suspending Toyota's assembly operations for days as a result.

Because of this, Toyota produced 62,000 units less than planned and sold 16,000 units less in Japan in July.

'We plan on recovering the delayed production by November. As for sales, we hope to achieve year-on-year growth in sales in the July-September quarter, as well as growth also in the following quarter,' Watanabe said.

He was speaking at the unveiling of Toyota's new sports utility vehicleVanguard, which will be sold exclusively in Japan. The company plans to sell 14,000 Vanguard SUVs in the four months to December.

Watanabe will brief the press on Toyota's business plans Friday afternoon.

(1 US dollar = 115.55 yen)

yumiko.nishitani@thomson.com

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