By Yoshio Takahashi
TOKYO—Toyota Motor /zigman2/quotes/200537742/composite TM +2.92% Corp. is targeting global vehicle sales growth of 3% next year as it looks to capitalize on burgeoning demand in emerging markets in Asia to offset sagging demand at home.
Toyota, the world's biggest car maker by sales volume, said Tuesday that it aims to sell 8.61 million vehicles world-wide in 2011, from an estimated 8.37 million vehicles sold this year.
The targeted and estimated sales numbers include vehicles sold by its Daihatsu Motor Co. and Hino Motors /zigman2/quotes/209422954/delayed JP:7205 +3.04% Ltd. subsidiaries.
The Japanese car maker looks to increase global sales next year even as it projects a fall of 12% to 1.93 million vehicles in domestic sales—the biggest percentage drop and the lowest volume since it started compiling its groupwide sales data in 1999. Domestic sales are set to slump after the government ended its incentive program in September.
Still, Toyota seeks to lift overseas sales by 8% with growing demand in China and other Asian markets projected to offset the expected sluggish domestic sales.
The projected global sales would mark the second straight year of growth after a 13% tumble in 2009, when demand collapsed during the financial crisis. Toyota's estimated global sales for 2010 represent a 7% rise from the previous year driven by solid sales at home and abroad.
This is an encouraging sign for Toyota, which is still beset by the aftermath of its massive global recalls earlier this year.
Earlier Tuesday, Toyota and the U.S. government said the car maker has agreed to pay $32.4 million in civil penalties for failing to properly disclose what it knew about safety defects linked to recalls in the U.S. last year and earlier this year. That follows $16.4 million that the company paid earlier this year to resolve a related U.S. government investigation.
Still, "the sales outlook looks a little bit too cautious," said Ryoichi Saito, an analyst at Mizuho Investors Securities.
The company could lift its sales projection later this year, as its forecast for a 17% drop in Toyota-only domestic sales, excluding sales at the two subsidiaries, is far higher than the Japan Automobile Manufacturers Association's forecast for a 10% fall in the overall Japanese market estimated for 2011.
Even so, the solid sales forecast doesn't guarantee healthy profit growth for the next fiscal year, which starts in April, as the volume growth won't be enough to offset the impact of the strength of the yen, which is cutting into profits at Toyota and its local rivals this fiscal year. The Japanese currency trades at near a 15-year high against the dollar.
On a Toyota-only basis, the auto maker expects demand to push its sales in China by 8% to 900,000 vehicles next year. It also projects an 11% rise to 2.1 million vehicles in other Asian markets excluding Japan, while it forecasts its U.S. sales to rise 9% to 1.9 million, as it hopes new models will lure customers. It estimates a 9% rise in the overall U.S. market, a Toyota spokeswoman said.
In Europe, sales are projected to gain 7% to 860,000 and sales in the Middle East, Latin America and other overseas markets will rise 6% to 1.3 million.
As the auto maker braces for selling more vehicles next year, it plans to produce 8.7 million vehicles in 2011, up 2% from 2010. Its overseas output will increase 6% to 4.8 million and domestic production will fall 4% to 3.9 million.
Write to Yoshio Takahashi at firstname.lastname@example.org