Toyota Motor Corp <7203.T> plans to raise production of its Tacoma and Tundra pickups to meet expected demand for trucks, and increase production of fuel-efficient vehicles through the end of the year, executives said on Tuesday.

A strengthening U.S. housing sector is forcing Toyota to raise production of its full-size Tundra pickup, which had its best sales month of 2009 in August at 7,872 units.

We're starting to see that activity show up in the full size truck market, said Bob Carter, group vice president and general manager, Toyota Division, said on a conference call.

Typically, sales of full-size pickups, a staple of the construction industry, increase as housing demand improves.

Toyota also plans to raise production of the Tacoma, a mid-size pickup truck produced at a California plant the automaker said last week it would close in March.

Tacoma production will be shifted to the truck plant in San Antonio, Texas, where Toyota produces the Tundra pickup, late in the year and the automaker is increasing output at the California plant in the meantime to ease the transition.

Toyota sold 12,547 Tacoma pickups in August, up 5 percent from a year ago.

In addition to the truck production, Toyota is funneling as many Camrys, Corollas, Priuses and RAV4s into its pipeline as possible to bolster an 11-day supply of vehicles for dealers.

The company is running as low as a three-day supply on the hybrid Prius after the recently ended U.S. government cash for clunkers program helped propel its U.S. sales up 6.4 percent in August from a year earlier, Toyota executives noted.

Toyota had a 19.4 percent share of the clunkers program, that ran from the last week in July through the first three weeks of August, the highest percentage among automakers.

Carter said that from September through November, Toyota would raise its average deliveries to dealers by about 43,000 vehicles per month over its rates from the summer.

It's an indication of our optimism, Carter said. We see some drop off in September, but we're starting to see concrete signs of automotive recovery moving into the fourth quarter.

(Reporting by Michael Strong, editing by Leslie Gevirtz)

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