Toyota Europe: Goodbye tsunami woes, hello growth

Toyota Europe has recovered from the impact of Japan's tsunami and earthquake last March and expects to increase both its sales and share of a shrinking European market, its CEO said.

Toyota Europe expects to sell 835,000 cars in 56 European markets in 2012 for a 4.5 percent market share, up from a 4.2 percent slice on sales of 822,000 last year, when deliveries were slowed by the devastating twin disasters that struck Japan, Didier Leroy told journalists late Monday on the eve of the Geneva Motor Show.

Leroy said that he expects Toyota Europe's automotive business to be close to breaking even when the 2011 fiscal year closes at the end of March, and expects to turn a profit in 2012. Including its financial services,Toyota Europe was profitable last year.

The western European market, comprising 27 countries, is expected to decline by about 5 percent while central and eastern Europe are expected to be broadly stable.

Leroy has been aiming for the one million mark, which he said should be reached in the next two to three years — pushed back slightly from 2013 by the financial crisis in Europe.

The one million mark "seems logical to me," Leroy said. But he said he wanted to achieve it not by rushing volumes but by building a sustainable business model.

While Toyota Europe produces cars like the Yaris and the Avensis station wagon at European plants, some components come from Japan. The carmaker's hybrid models also are produced in Japan.

"Yes, definitely we have recovered. We don't have any shortages any more, no supply problems any more," Leroy said on the eve of the Geneva Motor Show.

Toyota is premiering a hybrid version of its Yaris compact at Geneva, which will be produced in France from the middle of April for sale from June. The Yaris is Toyota Europe's best-selling car, comprising 20 percent of sales.

Toyota will also bring to market this year the Prius Plus, a seven-seat hybrid and the Prius plug-in hybrid, and the niche GT 86 sports car.

Leroy said that Toyota Europe was not concerned about plants lying idle — an issue that is affecting profits and productivity in the European industry in general.

Toyota plants are currently running at "well above 60 percent" capacity, Leroy said without specifying. He expects it to reach 100 percent when the next generation Auris hatchback and a new C-segment car — to be produced in Britain and Turkey respectively — are introduced in the coming years.

In addition, the French plant producing the new Yaris hybrid is running three shifts, pushing it above the original capacity of 180,000 units a year, he said.

"We want to use 100 percent of our capacity in Europe" to help maximize European profits, he said.