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UPDATE 1-Toyota says likely to miss '08 sales target
March 20, 2008 / 10:00 AM / in 10 years

UPDATE 1-Toyota says likely to miss '08 sales target

(Adds details, background, Toyota launch in South Korea)

SEOUL, March 20 (Reuters) - Toyota Motor Corp (7203.T) is likely to miss its groupwide global sales target for this year, hit by slowing sales in major markets and a firming yen, an executive vice president said on Thursday.

“Frankly speaking, sales in the U.S., Europe and Japan are showing signs of slowdown. It will be difficult to meet the group’s sales target of 9.85 million, although emerging markets such as China and Russia are active,” Tokuichi Uranishi, executive vice president of Toyota, told reporters in Seoul.

The sales target is 5 percent higher than sales in 2007.

Rising raw material prices are another concern to Toyota, the world’s most profitable and valuable car maker, said Fujio Cho, chairman of Toyota, and Uranishi, who is one of the top executives at Japan’s top automaker.

“The rise in raw material prices has been excessive this year. Coping with this is one of our top priorities,” Cho said.

Tokyo’s financial markets were closed for a national holiday on Thursday. Shares in Toyota ended up 3.9 percent at 5,080 yen on Wednesday.

Global demand for cars, especially in the United States, is weakening due to a slowing economy and the ongoing credit crisis.

Analysts expect the U.S. market to decline for the third consecutive year in 2008 amid a sluggish housing market, runaway gasoline prices and tighter credit.

Japanese car makers are facing tougher conditions as the yen JPY= has been rising against the dollar, hitting a 13-year high on Monday.

Meanwhile, Toyota said it planned to introduce Toyota-branded models in South Korea next year, aimed at non-luxury imported car market in Asia’s fourth-largest economy.

Toyota, which so far had only sold the luxury Lexus in South Korea so far, will bring the Prius hybrid car, the Camry sedan and the RAV4 sports-utility vehicle (SUV) to lure more local customers into showrooms.

The company aims to sell 500 units of those cars in South Korea per month initially, then raise the number to 1,000 vehicles a month eventually, Cho said.

Foreign car sales are still modest -- about 5 percent of the total market -- compared to those by local heavyweights Hyundai Motor Co (005380.KS), but they are eating into domestic makers’ profits as they usually compete with higher-margin, higher-end models.

In 2007, sales of imported cars jumped 31.7 percent, while domestic car sales rose, the Korea Automobile Importers & Distributors Association data showed.

But domestic car sales gained less than 5 percent. (Reporting by Cheon Jong-woo; editing by Marie-France Han and Ben Tan)

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