Toyota targets annual sales of 10 million vehicles

TOKYO  — Toyota Motor Corp. is aiming for an auto industry first by reaching annual sales of 10 million vehicles by 2015 even as it acknowledges that overly rapid growth was at the root of its recall fiasco.

Toyota President Akio Toyoda gave the 10 million figure Wednesday while outlining the company's "global vision" in his first major strategy announcement since the recall crisis that hit a year and a half ago.

The Japanese automaker reported worldwide sales of 8.42 million vehicles last year — 30,000 more than General Motors Co.'s 8.39 million. Toyota dethroned GM as the world's No. 1 automaker by vehicle sales in 2008 — a position GM held for 76 years.

Speaking at a Tokyo hotel, Toyoda said the car maker wants to make millions of customers happy, and even denied he was giving a numerical sales target. He repeatedly emphasized goals like quality controls, customer satisfaction and solid profits.

Toyota, which makes the Prius hybrid and Lexus luxury models, hopes to achieve an annual operating profit of 1 trillion yen ($12 billion) "as soon as possible," even if the yen remains strong and vehicle sales drop by 20 percent, Toyoda said.

The company is forecasting operating profit of 550 billion yen ($6.6 billion) for the fiscal year ending March 31.

Toyoda said the vision was based on what the car maker had learned from its quality problems and the sales hammering from the global financial crisis of 2009.

Analyst Jesse Toprak, vice president of Industry Trends and Insights at TrueCar.com, said the vision was too short on specifics such as model plans and marketing strategies, given the recent gains of rival U.S. automakers as well as South Korea's Hyundai.

"It was a little bit too wishy-washy. We need to see more concrete examples of what needs to be done," he said in a telephone interview. "There was a lot of wishful thinking."

Still, Toprak said reaching 10 million in annual vehicles sales was not impossible for Toyota — as long as it came up with more exciting model designs and successfully puts the quality doubts behind it.

Since late 2009, Toyota has announced recall after recall, covering a wide range of defects, including faulty floor mats, sticky gas pedals and glitches in braking software, ballooning to more than 14 million vehicles globally.

The company paid the U.S. government a record $48.8 million in fines for its handling of three recalls. Toyota faces dozens of lawsuits from owners in the U.S., including fatalities allegedly linked to defects.

Last month, U.S. regulators closed their 10-month investigation, clearing Toyota of electronic flaws, and finding mechanical problems covered by the recalls took care of the unintended acceleration cases.

The company has said quality problems emerged as it went through a period of rapid growth.

Toyoda said the automaker's board of directors will be reduced to 11 from 27, but the number of executives overseas will be boosted to 15 from 13, to make for quicker decision-making and to be more responsive to regional needs.

In an unusual personnel move, Toyoda's predecessor Katsuaki Watanabe — seen as a key figure in the go-go growth that predated the quality lapses — will resign from the board of directors as part of the management streamlining. The resignation will be effective after a shareholders' meeting set for June. Past presidents have stayed on longer, and Watanabe's predecessor Fujio Cho remains on the board.

Toyota will also empower its regions, including North America, which will center around development and production of the Camry sedan, to better cater to their needs, he said. That appeared to answer to criticism about how Toyota had been initially slow in responding to the quality problems, worsening the image damage that followed.

The automaker will also focus more on emerging markets for new growth, aiming for 50 percent of its sales from those nations, up from the current 40 percent.

It said green vehicles are another pillar for the future, planning to launch 10 more hybrid models by 2015.

Toyota announced two new, bigger versions of its hit Prius hybrid — station wagons that are set to go on sale in Japan next month. The five-seater version will also go on sale in North America later this year. The seven-seater, packed with a new lithium-ion battery, will go on sale in Europe as well next year. Prices and mileage haven't been announced yet.

"I want Toyota to make good cars that wil make everyone smile," Toyoda told reporters.

He said each region will work harder when achieving sales growth to ensure that quality is not compromised. He stressed Toyota was not chasing numbers.

"I was just answering a question," he said, when pressed about why he had given the 10 million vehicles number.

Another big change from past visions, where the numbers game was big, was that the latest was written in English, which Toyoda said was the world's international language.

Toyoda often switched into English during the presentation, using phrases like "smiles from customers around the world," and "our commitment to quality and constant innovation."

"This vision is about what kind of company we are, our values and the road to what kind of company we want to be," Toyoda said.