Toyota to Meet U.S. Prius Goal as Economy Gains, Lentz Says

Toyota Motor Corp. (7203) said it will meet the sales goal for its Prius model in the U.S. after saying in April that the world’s biggest carmaker may adjust the target as declining gas prices sap demand.

“We’re on target for sales of 250,000 units of the Prius family,” Jim Lentz, Toyota’s North American chief executive officer, said today in Nagoya City, Japan. “The U.S. economy finally seems to be improving.”

Toyota’s U.S. deliveries have missed analyst estimates for four straight months and its sales gain in the five months ended May trailed behind industrywide growth amid demand for pickup trucks. U.S. automakers including General Motors Co. (GM) and Ford Motor Co. (F) have gained 1.2 points of market share this year as sales continue on a pace for the best year since 2007.

“Competition is very fierce in the market this year, and with relatively low gasoline prices, demand for models such as Toyota’s Prius may not be very strong,” said Yoshiaki Kawano, a Tokyo-based analyst at industry researcher IHS Automotive. “The new Corolla due later this year will be a chance for Toyota to boost sales.”

Industrywide deliveries have increased 7.3 percent to 6.42 million units through May this year, according to Woodcliff Lake, New Jersey-based industry researcher Autodata Corp. Toyota’s sales rose 5.2 percent to 913,556 units in the same period. It’s targeting deliveries of 2.2 million units in the U.S. this year, a 5.6 percent increase from a year earlier.

Toyota is also seeing “good” pickup truck demand in the U.S. amid “the best consumer confidence in the past five years,” Lentz said.

Toyota expects sales of 250,000 pickup trucks this year, an increase of 2.8 percent from a year earlier. Pickup demand will increase to about 2 million units industrywide, from about 1.94 million units a year earlier, Lentz estimates.

Toyota fell 1.8 percent to 5,860 yen at the close of Tokyo trading. The shares have gained 46 percent this year, compared with the 28 percent advance in the benchmark Nikkei 225 (NKY) Stock Average.

Fuel Prices

While sales of its Prius hybrid vehicles last month were the best in a year, Toyota in April said deliveries of the gasoline-and-electric models may not reach a target for growth in 2013 after falling 8.4 percent in the first quarter.

“Despite what the actual gasoline prices are, lower demand for fuel-efficient models such as the Prius show that consumers are going for pickup trucks on an assumption for gas prices to remain low,” said Koichi Sugimoto, a Tokyo-based auto analyst at BNP Paribas SA.

Lexus Sales

The carmaker also expects to introduce the IS models for its luxury Lexus brand in the U.S. in the next few months, Lentz said today.

Lexus sales have increased 10 percent to 97,060 units this year in the U.S., the biggest market for the premium models. That puts the luxury brand ahead of its target to sell 260,000 units, or 6.5 percent more vehicles from a year earlier, in the market this year. Still, Toyota’s luxury brand lags behind Bayerische Motoren Werke AG and Daimler AG’s Mercedes-Benz.

“Setting aside what the company’s target for Lexus sales is, it would be great if Lexus can really regain its momentum and outperform BMW in volume sales,” BNP Paribas’s Sugimoto said.

In 2012, BMW and Mercedes-Benz outsold the Lexus brand for a second straight year in the U.S. BMW sales increased 8.2 percent to 113,357 units in the five months ended May, while Mercedes-Benz led the U.S. luxury-auto market with 117,535 vehicles, up 11 percent.

Toyota also plans to increase the portion of cars made in the U.S. for sale in the country to 75 percent from the current 70 percent level, Lentz said today.

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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