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02 March 2024

Toyota targets emerging markets

By Agencies

Toyota Motor Corporation will move further into emerging car markets to achieve another year of record sales in 2008, likely cementing its title as the world’s biggest car manufacturer ahead of General Motors Corporation.


Toyota, already the world’s most profitable and valuable car manufacturer, said it expects to sell 9.85 million vehicles in 2008, up from an estimated 9.36 million this year – a result that is likely to nudge it past GM’s sales forecast of 9.2 million for 2007.


With a product line-up including the Camry and Prius hybrid cars, Toyota has attracted more customers in emerging and mature markets alike, all the while increasing profits through cost cuts and economies of scale.


Stripping out GM’s minority-held Chinese joint venture, the Toyota group, which includes units Daihatsu Motor Company and Hino Motors, overtook the US giant in global vehicle sales last year.


Toyota, valued at about $190 billion (Dh697.3bn) , is likely to widen its sales gap with GM next year as the restructured US car manufacturer scales back production in North America and prepares to sell off its medium-duty truck business to Navistar International Corporation. As with most other car companies, Toyota’s growth has been especially brisk in the emerging car markets of China and Russia, where it expects combined sales of roughly 900,000 vehicles next year, a rise of about 40 per cent. “The Chinese market has undergone a significant change during the year,” President Katsuaki Watanabe told a year-end news conference.


“At the beginning of the year, we wondered if the total car market would reach eight million, and by mid-year we were looking at 8.5 million. Now it’s possible the market will exceed nine million,” he said. “We need to figure out how to meet demand.”


Toyota has a target of selling one million cars a year in China soon after 2010, and Executive Vice-President Tokuichi Uranishi said it would need several new factories to ramp up supply.


Toyota has been expanding its factories and building new ones at breakneck speed around the world, including its first plant in Russia that opened last week. Executives said Russia would drive expansion in Europe, where Toyota aims to increase sales by two per cent to 1.27 million vehicles next year.


Toyota expects to build 9.95 million vehicles globally next year, a rise of five per cent. On the most important US market, Watanabe sounded a cautious tone, predicting only slight growth for Toyota in a flat overall market littered with risks. “We expect the economy to slow down a bit, and there are risks from the sub-prime loan crisis and crude oil prices,” he said.


Toyota, which ranks second in the US market now ahead of Ford Motor and Chrysler, expects its US sales to grow one per cent to 2.64 million vehicles in 2008.


Elsewhere, Toyota has yet to make headway in the promising markets of India and Brazil without a product in the dominant segment of cheap, no-frills cars. Toyota has promised an ultra-low-cost family car to crack such lower-income markets, as France’s Renault SA has done with the Logan.


“I feel we are coming close to making a decision on when and where to launch the vehicle, but we need a little more time to make improvements, including in the cost area,” Watanabe said. (Reuters)