Toyota Targets Europe Growth, Aims For 1.2 Million Sales

TOKYO -October 29, 2002 Dow Jones reported that the Toyota Motor Corp. is drawing up ambitious growth targets that would see the Japanese carmaker attempt to pass Citroen and Mercedes-Benz to become Europe's number-eight marque, the Financial Times reported on its Web site Wednesday.

The company has told dealer groups that it is aiming for sales of 1.2 million - half as much again as its current target - and is thought to be hoping to achieve that by 2010, the report said.

The targets, which have yet to be finalized, underline the confidence of the company, which has been highly successful in Europe in the past year after decades of lackluster growth. A sales jump of 13% in the first nine months - while the market fell 4% - means Toyota is expected to report turn its first profit in Europe this year.

The group will on Wednesday announce record profits for the six months to the end of September, expected to be up 44% at Y760 billion ($6.2 billion) before tax.

The targets are a sharp step up from the current aim of 800,000 European sales, 5% of the market, by 2004, which the company expects to meet a year early.

"It is clear that we have aspirational goals for the future but we can't comment on any specific figures," Toyota said.

The 1.2 million goal, 7.5% of this year's forecast EU light vehicle sales of about 16 million, is double last year's sales of 644,000 and ahead of the Citroen brand of PSA Peugeot Citroen, the French carmaker. But it remains well behind market leader Volkswagen of Germany, which sold 1.8 million cars and vans last year under its own marque and had total group sales of 3.3 million.

"Toyota is one of those companies you never want to bet against because they are so financially powerful," said Keith Hayes, vehicle analyst at Goldman Sachs.

Japanese carmakers were hampered by import quotas until three years ago. Until this year Toyota, along with Nissan Motor (NSANY or 7201), Honda Motor Co. (HMC or 7267) and Mitsubishi Motors Corp. (J.MOT or 7211), had failed to take advantage of their freedom to increase sales. Between them Japanese companies had total share of western European car and van sales of just 10% last year - down slightly on 2000.

This compares with a share of more than 35% of the US market.

People close to Toyota said growth had taken time because the company chose to design cars for the European market in order to expand, rather than simply cut prices.

Toyota's aggressive targets come as several of the biggest European carmakers are struggling with turnaround plans, the FT reported.