Toyota Motor Corp (7203.T) is preparing a $1 billion marketing campaign to boost U.S. sales in the fourth quarter, while also planning to expand its line of hybrid models under the Prius name, the Wall Street Journal reported on Thursday.

Toyota President Akio Toyoda was among those briefing U.S. dealers at a meeting in Las Vegas where the plans were laid out, the newspaper said.

The $1 billion marketing and advertising plan is 30 percent to 40 percent more than Toyota typically spends in the quarter, the report said, citing a person familiar with the matter.

The plan includes subsidizing leases and loan rates, offering other customer incentives and helping pay for dealer ads, the Journal said.

The plan comes as Toyota is struggling with its worst downturn since it was founded in 1937 and is expecting to report a loss for the second straight fiscal year.

Toyota also plans to raise the projected resale value of its vehicles, a figure used in calculating monthly lease payments, the report said, citing dealers briefed on the plan.

Toyota landed three models among the top 10 sold in the recent Cash for Clunkers incentive program by the U.S. government.

The media blitz comes less than a week after General Motors Corp [GM.UL] announced its own media campaign, in large part aimed at recapturing consumers who believe Toyota and other foreign automakers make better products.

Toyota executives in Frankfurt this week said the company planned to sell 500,000 to 600,000 hybrid vehicles globally by the end of 2009. (Reporting by Bernie Woodall; Editing by Lisa Von Ahn)