Toyota's Struggle in N. America Continuing

Tokyo, Feb. 25 (Jiji Press)--Toyota Motor Corp. <7203>, hit by
massive vehicle recalls, is expected to take some time before its North American sales recover.

With congressional testimony by President Akio Toyoda already
behind it, Toyota has passed a key juncture in the recall saga.
But that does not mean the automaker has restored its reputation or
erased concern among U.S. lawmakers about the electronic throttle control
systems of its vehicles.
North American sales have already started falling. Sales dropping
in Japan or other markets would deal a heavy blow to Toyota, which is still
recovering from the steep downturn triggered by the global financial crisis.
North America is the company's key market. The Toyota group's
annual sales there exceed two million units, accounting for some 30 pct of
its global sales.
In fiscal 2009, ending in March this year, North American sales are
projected to fall 7.3 pct from the previous year to 2.05 million units.
But in January, by which the recall issue had become a hot topic,
sales dropped 15.3 pct year on year to 108,000 units, a sharp downturn from
a 35.5 pct rise in the previous month.
While U.S. rivals Ford Motor Co. and General Motors Co. enjoyed
higher sales, Toyota's sales dropped for the first time in four months in
January.
Into February, criticism of Toyota by U.S. government officials and
the media has mounted. With another public hearing on the recall issue
slated for March, it is unlikely Toyota's North American sales will recover
this month.
If sales continue falling at a rate of more than 10 pct, Toyota's
annual sales in the North American market will fall below two million units.
Toyota lags behind other Japanese automakers in emerging economies
in Asia. So its weakness in North America will be a major drag on its
earnings recovery.
Sales in Japan, close behind North American sales, remain firm.
Toyota's domestic sales expanded year on year for six months running until
January thanks to government stimulus measures.
But sales have headed south since Toyota launched a recall of the
Prius hybrid car in Japan on Feb. 9, President Toyoda said.
If Japanese sales falter, Toyota's goal of swinging back to
profitability will be harder to achieve.