US gloom knocks Toyota forecasts

Japanese carmaker Toyota has said it expects to sell fewer cars this year than previously forecast because of the weak US car market.

The firm has lowered its sales forecast from 9.85 million to 9.5 million vehicles, although this would still represent a 1% increase on last year.

Toyota's emphasis on smaller, more fuel-efficient vehicles has seen it gain ground on GM globally.

Rival carmaker Honda also downgraded its sales forecasts on Friday.

Recession fears

All carmakers are having to come to terms with reduced demand in the US as soaring gasoline prices and fears of a recession prompt many Americans to put off replacing their cars or buying new ones.

Global sales growth of 1% this year for Toyota would represent a sharp slowdown on last year's 6% annual increase.

Flagging sales in the US and Japan have been partially offset by surging demand in emerging markets such as Russia and India.

Toyota still expects foreign sales to be 2% higher than 2007 at 7.27 million but domestic sales are expected to fall 1% to 2.23 million.

It now expects to manufacture 9.5 million vehicles this year, the same as 2007 but below its forecast of 9.95 million earlier this year.

The revised figures were released after markets closed on Monday.

But Honda shares fell 3% after the firm said on Friday that sales and profits in 2008 would be lower than initially thought, even as it reported better-than-forecast quarterly profits of 179.6bn yen ($1.68bn; £845m).

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