Toyota cuts 2008 outlook

By Chang-Ran Kim

TOKYO (Reuters) - Toyota Motor Corp (7203.T: Quote, Profile, Research) on Monday cut its 2008 groupwide global sales forecast by 350,000 units to 9.5 million vehicles due to a pronounced downturn in the U.S. market, in a rare setback for the world's biggest automaker.

The weaker sales outlook also means global production at the parent company would fall 1 percent from 2007 to 8.43 million vehicles, marking the first decline in seven years.

Toyota's revision underscores an ever-toughening environment for global automakers faced with falling demand for cars, especially higher-margin, bigger vehicles amid rising gasoline pump prices.

Profits are already under severe pressure as prices of steel and other raw materials continue to climb, while tightening environmental regulations raise the cost of research and development.

Analysts said the sales revision was expected after a weak performance in the year to date, particularly in the U.S., but one raised concerns about a possible profit warning when Toyota announces its April-June results on August 7.

"Toyota typically doesn't alter its forecasts at the first quarter, but after a revision of this scope there's always an off chance that they'll lower their earnings outlook," said Credit Suisse auto analyst Koji Endo.

Toyota's initial global sales plan called for sales at the group, which includes truck unit Hino Motors Ltd (7205.T: Quote, Profile, Research) and minivehicle maker Daihatsu Motor Co (7262.T: Quote, Profile, Research), to grow 5 percent to 9.85 million vehicles this year. Overall sales forecasts did not change at Hino and fell only 10,000 units at Daihatsu. Toyota was responsible for the rest of the undershoot.

Global sales are now expected to rise just 1 percent, likely keeping Toyota ahead of General Motors Corp (GM.N: Quote, Profile, Research) as the world's biggest carmaker.