Asia August 28, 2008, 11:18AM EST

Toyota Trims '09 Outlook, Plans Electric Car

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In Brazil and India, large markets where Toyota trails rivals, it will add new specially designed compact models in 2010 and 2011, respectively.

High on the iQ

By contrast, plans for Europe, Japan, and North America are more concerned with stability and adapting model lineups to fast-changing customer needs. In Europe, that means more models that produce less carbon dioxide, including the launch later this year of the iQ, a tiny city car which produces just 99g/km of CO2. In total, Toyota is planning 18 low-emissions vehicles for launch in 2008 and '09.

In the U.S., where Toyota opened a large Tundra pickup factory in San Antonio in 2006, just before the market for large trucks lost steam, the company is busy reorganizing production. For the first time, its Prius hybrid will be built in the U.S., in Mississippi, while large-truck production is being consolidated at the Texas plant. As part of the shakeup, Toyota is suspending production at three U.S. plants for three months. That's something Watanabe, who will visit Toyota's North American operations next week, described as a "very, very difficult decision to make." In all, the changes affect 4,500 Toyota employees, although none will be laid off. Instead, Toyota is asking them to keep busy by doing everything from training programs to filling in at assembly lines elsewhere or helping out in local communities.

Toyota's new forecast for North American sales in 2009 is 2.7 million, the same number of vehicles it plans to sell this year, but down from a previous target of 3 million. Still, Watanabe is confident the company will benefit in the long term from the changes—not least when the auto market picks up. While unwilling to make forecasts beyond 2009, "in the U.S. it is unlikely for the economy to remain stagnant for long," he says.

Business Exchange related topics:
Asian Automakers
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Electric Cars
Hybrid Cars
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Rowley is a correspondent in BusinessWeek's Tokyo bureau.