Toyota Europe sees sales up in 2011

The carmaker had cut its forecast after a safety scandal dented its market share earlier this year, but has seen the situation recover since June, Toyota Motor Europe President Didier Leroy told reporters in Paris on Wednesday.

We can expect now that we will be able to recover 100 percent of what we lost versus our initial forecast, said Leroy, who replaced Tadashi Arashima in July as head of the unit, the first non-Japanese executive to hold that post.

We strongly believe that we will be able to achieve 800,000, he added. Toyota has been embroiled in a safety scandal, recalling over 10 million vehicles in the past year mostly for unintended acceleration, denting its reputation for quality and gaining intense scrutiny by U.S. safety regulators.

After starting the year with 4.7 percent market share in Europe, including Russia, Turkey and Israel, there was a big drop from February, before improving to 4.8 percent in August. Toyota hopes it will be over 4.3 percent for the year.

Government-backed scrappage schemes boosted European demand last year for carmakers hit by the crisis, but these have either finished or are running out, leaving makers with doubts about the latter part of 2010.

The car market in the region should be similar next year to 2010 as growth in Turkey and Russia offsets declines in western European countries, Leroy said.

Next year, even if the market decreases a little bit, we should sell more, he said.

Leroy said Toyota Motor Europe ultimately wanted to achieve annual sales of 1 million vehicles but would not sacrifice profitability to achieve volumes.

Toyota Motor Europe wants to return to profitability while also achieving 1 million annual sales in the next five years, Leroy said.

Leroy added that the strength of the yen was putting pressure on Toyota Motor Europe as it faces tough competition from Korean carmakers, for example. The currency situation is creating terrible conditions, he said.

The company is cushioned by producing 50 to 60 percent of the cars it sells in the Europe region locally, but is also looking at further localization, Leroy said.

Leroy was speaking at a reception ahead of the Paris Auto Show which opens to the media on Thursday and the public on Saturday.

(Editing by David Holmes)