AUTOSHOW-Toyota: hybrids to fuel Europe sales to 1 mln by 2014

Mon Feb 28, 2011 2:56pm EST

* To add at least 10 new hybrid models in Europe by 2013

* Sees Europe sales up 10 pct in 2011

* Sees hybrids making up 20 pct of Europe sales by 2013

* Europe ops made money in Oct-Dec, 1st time in 3 years

* Aims for positive free cash flow in FY2011, profits in FY2012

By Chang-Ran Kim, Asia autos correspondent

GENEVA, Feb 28 (Reuters) - Toyota Motor Corp (7203.T) expects the addition of at least 10 new hybrid models to help drive a rise in European sales to 1 million vehicles by 2013 or 2014, up about a quarter from last year, a top executive said on Monday.

Toyota Motor Europe President Didier Leroy also said the world's top automaker would aim to boost sales in the region by 10 percent this year from the 808,000 sold in 2010 -- higher than the 7 percent gain that headquarters had forecast in December.

"Between 2013 to 2014, we must return to 1 million sales," Leroy, who became the first non-Japanese head of Toyota's European operations last June, told reporters on the eve of the Geneva auto show. About 20 percent of those sales will likely be a hybrid car, he said, compared with 9 percent last year.

Toyota's European sales peaked at 1.2 million vehicles in 2007, before the financial crisis hit.

While Toyota's market share fell slightly, to 4.6 percent in Europe last year hit by the recall crisis, Leroy said earnings were improving faster than expected thanks to a more disciplined approach to costs and marketing. In the October-December quarter, the European operations made a profit of 20 million euros ($27.5 million), reversing losses for the first time in about three years, he said.

"We want to have a profitable growth," he said. "Many of our competitors currently have one target in Europe: beat Toyota. This is part of the game. (But) we don't want to beat anybody; we just want to grow in a profitable way."

Toyota's operations in Japan are losing money on car exports with the euro stuck near a historical low 112-113 yen. Toyota imports about half of the cars it sells in Europe from Japan.

But as a stand-alone regional operation, Leroy said Toyota Europe would aim to contribute to the group's earnings, first by generating free cash flow from the business year starting in April 2011, and returning to the black on an annual basis the following year.

HYBRID DRIVE

Driving much of the sales and profit growth will be Toyota and Lexus' hybrid vehicles, including the gasoline-electric Yaris subcompact model to be rolled out in Europe in the second half of 2012. A teaser version of the car, the Yaris HSD concept, will debut in a world premiere at the Geneva auto show on Tuesday.

Hybrids are gradually gaining momentum in Europe after a slow start compared with Japan and the United States, with BMW (BMWG.DE) and PSA Peugeot Citroen (PEUP.PA) on Monday announcing plans to invest 100 million euros in a hybrid technology joint venture. [ID:nLDE71R1WJ]

"This is wonderful news for us," Leroy said of the Franco-German partnership, adding it proved that consumers were rethinking hybrids as a smart choice to drive less polluting cars and lower the cost of ownership by using less fuel. Toyota and Lexus currently offer six hybrid models in Europe.

In just two years, the percentage of consumers in Europe saying they would consider a hybrid for their next car purchase grew to 16 percent from 8-9 percent in 2009, Leroy said. (Editing by Dave Zimmerman)

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