The head of Toyota Motor Corp <7203.T> on Friday called the current dollar-yen rate very tough, saying the weak U.S. currency made it difficult to return to profit on an unconsolidated level.

When you get to this level, it makes it difficult to return to profit on sales growth alone, President Akio Toyoda told a news conference at the Japan National Press Club.

Toyoda repeated Toyota's aim to return to profit at the parent level as soon as possible, even as it expects global sales to fall 18 percent from 2008 to 7.34 million vehicles this year. That would leave about 30 percent of its production capacity unused.

Toyoda took the helm in June as the world's biggest automaker faced one of its biggest crises in history amid a global credit crunch and an industrywide sales slump that forced two U.S. automakers into bankruptcy.

For the financial year to March, Toyota has projected a consolidated operating loss of 750 billion yen ($8.4 billion), assuming a dollar rate of 92 yen. It has forecast a parent-only operating loss of 600 billion yen.

Presenting a further challenge, Toyota said this week it would recall some 3.8 million vehicles in the United States -- its largest-ever -- because of a risk that a loose floormat could force down the accelerator. The problem is suspected of causing at least one crash that killed four people.

Expressing regret over the incident, Toyoda said the company was working with U.S. traffic safety authorities to get to the bottom of the problem. He declined to estimate the scope of damage -- financial or otherwise -- that the recalls would have on Toyota.

Right now, we're focusing all our energy on taking steps that are in the interest of our customers, he said. I sincerely regret the loss of life of our four customers.

Last month, an off-duty California state trooper and three members of his family were killed in the San Diego area in a crash of a 2009 Lexus ES350. The vehicles subject to the recall include the popular Prius hybrid car.

JAPAN INCENTIVES HELPING SALES

The Prius has helped fuel sales growth at Toyota especially in Japan, where the government is offering two sets of incentives to promote cleaner, more fuel-efficient cars.

Toyoda said he would welcome an unlikely extension of Japan's cash-for-clunkers scheme beyond next March, while adding that it would not be prudent to keep depending on the government for help.

In the United States, Toyota's sales fell almost 13 percent in September from the year before as the market suffered a sharp pullback after the government-funded cash-for-clunkers program ran out. Total U.S. sales tumbled 23 percent.

Shares of Toyota ended down 3.7 percent at 3,380 yen, mirroring a sharp fall in other auto stocks as the dollar traded around 89.40 yen, within sight of an eight-month low of 88.23 yen struck on Monday.

(Editing by Chris Gallagher)

Japan Toyota