Toyota to top 10 mln vehicle sales in 2009

TOKYO, Aug 31 (Reuters) Toyota Motor Corp expects to sell 10.4 million vehicles in 2009, up 18 percent from last year, as it taps surging demand in China and emerging economies and grabs market share in Japan, Europe and the United States.

Toyota, along with minivehicle unit Daihatsu Motor Co and truck maker Hino Motors Ltd, sold a record 8.81 million vehicles last year, overtaking General Motors Corp as the world's biggest automaker -- a title held by the Detroit giant for the previous 75 years.

Globally, Toyota expects group sales of 9.34 million vehicles this year and 9.8 million in 2008.

Toyota is cranking up its share of sales in mature markets in North America, Europe and at home with fuel-efficient models such as the Prius hybrid and RAV4 crossover. It is also muscling into the full-size pickup truck segment in the United States with the Tundra.

The world's most valuable carmaker -- even after its shares have dropped 15 percent in two months, its market capitalisation still tops 0 billion -- has been growing more rapidly in China and Russia, where rising incomes are driving double-digit growth in demand.

The challenge now is to repeat that success in promising markets such as India and Brazil, where it is still a niche player due to a lack of competitive products.

''We have been growing with a well-balanced regional portfolio,'' President Katsuaki Watanabe told a news conference.

''We believe that offering attractive products in new markets outside Japan, the United States and Europe is the key to future success.'' In 2009, Toyota expects to sell around 3.1 million units in North America, 2.4 million in Japan, about 1.45 million in Europe and 1.9 million cars in Asia.

It predicted its China sales would hit 1 million cars soon after 2010, in line with a previous target of 10 percent share in the world's No.2 autos market. Toyota expects to sell 430,000 cars in China this year, up 40 percent from 2006.

SHARES WEAK Like rivals Volkswagen AG, Honda Motor Co, Nissan Motor Co and others, Toyota is working on a low-cost car to compete in emerging markets, but has struggled to balance cost and vehicle quality.

Watanabe said little about the car's progress on Friday, focusing instead on the need to step up vehicle quality while reducing development costs.

The world's top automakers are targeting emerging markets, which will account for most of the industry's growth as demand sputters in the United States, Japan, and much of Europe.

Last year, Toyota sold a little over half its cars in the United States and Japan, excluding its units, and makes more than half its profits in North America.

Toyota has been racing to add production capacity around the world to meet demand, and has plans for new factories in Russia this year, Canada next year and Mississippi around 2010.

Toyota shares have been dented by investor concern over a stronger yen and worries that turmoil in the U.S. subprime mortgage market may dent U.S. demand for cars.

''The yen's a little higher and the external environment is not being that kind, so it's hard for the stock to aggressively move higher,'' said Junichi Misawa, senior fund manager at STB Asset Management.

In terms of dividend yield and valuations, however, the stock looked very attractive long-term, he added.

Watanabe said Toyota aimed to increase its consolidated dividend payout ratio to 30 percent in about three years from 23.4 percent in the year ended March 31.

Toyota has said it should maintain its operating profit margin at around 10 percent in the medium to long term.

REUTERS DKS VV1629