Toyota Says European Prius Sales to Rise 83% in 2005 September 2004

Sept. 23 (Bloomberg) -- Toyota Motor Corp., the world's largest producer of gasoline-electric hybrid vehicles, forecast European sales of its Prius will almost double next year as soaring oil prices make fuel-efficient vehicles more attractive.

The world's second-largest automaker forecast sales of 15,000 Prius cars in 2005, compared with a revised 8,200 this year, Takis Athanasopoulos, executive vice president of Toyota Motor Europe, told reporters in Paris.

The Prius, first released in 1997 in Japan, is one of Toyota's fastest-selling models globally, with waiting times in the U.S. as long as six months. Sales of the Prius have lagged in Europe, where diesel-powered cars are more popular.

``Toyota is trying to use its hybrid cars to expand into Europe because it's behind other rivals in developing diesel engines, which are popular there,'' said Song Sang Hoon, an analyst at Hyundai Securities Co. in Seoul. ``With oil prices soaring, a lot of people are trying to find ways to cut back on costs and hybrid cars are meeting that demand. Their performance has already been proven in the U.S. and Japan.''

Global sales of the Prius may rise 71 percent this year to 130,000 cars, Toyota said in June. The Toyota City, Japan-based automaker plans to increase Prius production capacity to 15,000 a month, or 180,000 a year, from the current 10,000, starting in the first half of 2005, to meet demand.

Environmentally Friendly

The Prius sells for $20,000 in the U.S. with customers including actors Cameron Diaz and Leonardo DiCaprio.

``Because of all the environmentally friendly reasons, people in Europe are acknowledging the significance of hybrid vehicles,'' said Toyota Executive Vice President Akihiko Saito. ``We will strengthen our line up of diesels in Europe, but hybrid will be another push.''

In Europe, Toyota sold 4,872 Prius in the first eight months of 2004, equal to 98 percent of its initial annual sales objective of 5,000, Athanasopoulous said.

Toyota revised its 2004 overall sales target in Europe to ``over 900,000 units'' from 860,000 units, up from 835,000 units in 2003.

The automaker's shares rose 0.2 percent to 4,190 yen on the Tokyo exchange yesterday.

The Prius emits 90 percent less tailpipe exhaust than the average new car with a same-size engine, according to the U.S. Environmental Protection Agency.

Diesels

Its hybrid drive system uses both electric and gasoline motors. The electric motor powers the vehicle at low speeds, with the gasoline engine taking over as the car gains speed. The car's battery pack is recharged using the conventional gasoline engine and by the brakes.

More than 40 percent of the 15 million vehicles sold annually in Europe have diesel engines. Toyota had 5.1 percent of the West European market in the first eight months of the year.

Toyota is also trying to boost sales of its diesel-powered cars in Europe. At this week's Paris Car Show, it plans to unveil what it says is the world's cleanest diesel engine, which will go on sale next year. Diesel sales make up about 30 percent of its total sales in Europe.

Last week, Toyota announced plans to assemble Prius kits in northeastern China with partner China FAW Group Corp., the first time it will build the cars outside Japan. It will also license engine technology to allow FAW to make its own hybrids.

SOURCE: Bloomberg

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