Toyota Chief Says New Models will Aid Recovery

Toyota unveils the 'Alphard' and 'Vellfire' models

Aiming to re-energize a flagging domestic market, Toyota on May 12 unveiled the "Alphard" and "Vellfire" mini-vans, setting an initial monthly sales target of 3,000 vehicles for both models. The company say it hopes these models should help it bounce back from an expected drop in annual profits, the first in nine years.

"We believe making and offering products that attract consumers is very important, especially at a time like this," Toyota president Katsuaki Watanabe said reporters at the launch. The best way to raise profits was to launch powerful products that could expand Toyota's market share, he said.

Toyota, on course to overtake General Motors as the world's top selling automaker, last week blamed a weak U.S. economy, a stronger yen and soaring raw material costs for its gloomy earnings outlook. It forecast a 29.5% drop in operating profit to 1.60 trillion yen for this fiscal year to March. Watanabe said the forecast was not overly conservative in the current business environment, pointing to the stronger yen as the main negative factor. "Plus, we have to cope with high oil and steel prices. It's not easy at all," he said.

Japanese automakers have enjoyed brisk profits in overseas markets, helped by firm demand for fuel-efficient cars and a weak yen. With a credit crunch, the surging cost of raw materials and a falling dollar weighing on their earnings prospects, they are now targeting emerging economies to maintain their growth. In Japan, a shrinking population is weighing on auto sales.

Copyright Agence France-Presse, 2008

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