Toyota Motor Corp. (7203), the world’s largest seller of gasoline-electric autos, boosted its global sales target on higher demand for a new small Prius model and its other hybrids, buoyed by government incentives in Japan.
The automaker now expects to sell 8.58 million vehicles this year, a 21 percent annual increase, according to a statement today. The target is 100,000 higher than the Toyota City, Japan-based company’s projection last month and excludes subsidiaries Daihatsu Motor Co. (7262) and Hino Motors Ltd. (7205)
Toyota, outsold by General Motors Co. (GM) and Volkswagen AG (VOW) in 2011, is counting on Japan’s incentives for fuel-efficient autos and the small Prius Aqua, known as the Prius c in the U.S., to help regain market share after natural disasters in Japan and Thailand crippled production. The recovery will help the maker of the Camry sedan double its profit next fiscal year after the output shortfall leads to an earnings decline in the 12 months ending in March, according to analysts’ estimates.
“Incentives in the domestic market will definitely give Toyota an advantage over GM and VW,” said Satoru Takada, a Tokyo-based auto analyst at research firm Toward The Infinite World Inc. “With the earthquake and flooding gone, Toyota’s sales will rebound in all of its markets.”
Toyota’s American depositary receipts rose 2.6 percent to $74.22 at the close in New York. They declined 11 percent in the past 12 months.
Toyota still faces the strength of the yen, which has appreciated more against the dollar than any other major currency in the past six months, undermining the value of Japanese exports. The company must also contend with a healthier GM, which became the world’s biggest automaker in 2011 two years after exiting a U.S. government-backed bankruptcy, and the rising popularity of Hyundai Motor Co. (005380)’s cars worldwide.
The yen, coupled with the production disruptions stemming from the March 11 earthquake and tsunami, led to Japan’s first annual trade gap since 1980, according to government figures released today.
To protect a domestic industry reeling from natural disasters and the yen’s appreciation, the Japanese government last month began waiving some taxes and offering rebates for certified low-emission vehicles, allocating 300 billion yen ($3.8 billion) in the fiscal budget. Eligible consumers will be exempt from paying the 3 percent purchase tax, the 2,500 yen per half-ton duty and receive a rebate, according to the nation’s transport ministry.
Tax Breaks, Rebates
For example, customers of the Prius hatchback, which starts at 2.17 million yen, can get 135,500 yen in tax breaks and a 100,000 yen rebate, according to Toyota’s website.
By comparison, consumers in the U.S. who purchase low- emission vehicles such as GM’s Chevrolet Volt and Nissan Motor (7201) Co.’s Leaf are eligible for a federal tax rebate of $7,500.
The Japanese state aid will help the nation’s automakers increase sales by 900,000 vehicles in their home market this year after a record 14 percent drop in 2011, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said late last month.
Toyota may sell 1.63 million vehicles in its home market and 6.95 million overseas, Senior Managing Director Masamoto Maekawa said in Nagoya, Japan. The company received more than 100,000 orders for the Aqua and about 3,000 for the plug-in Prius in Japan since their introduction late last year, he said.
Delivering on Time
“We are currently assessing our production lines of the Aqua, and we hope to deliver all our cars on time,” Maekawa said. Toyota hasn’t announced a U.S. sales goal for the Prius c, which goes on sale in March.
Demand for the new compact Prius may lead Toyota to also raise its 2012 production target for the model by 30 percent to 320,000 units, the Nikkei newspaper reported today, without citing anyone.
Those figures would indicate global sales of the model may exceed the total number of cars bearing the Prius name that Toyota projects to sell in the U.S. this year.
Jim Lentz, head of sales in the U.S., Toyota’s biggest market, said in Detroit this month that Prius sales in the country would climb more than 60 percent to a record and exceed 220,000 vehicles, fueled by the new smaller version of the hybrid hatchback.
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