TOKYO - A buoyant Toyota Motor Corp. upgraded its earnings forecast and also projected sharply higher sales at home and a big increase in production abroad during 1995.

But Japan's largest carmaker also expects production at home to fall again in 1995.

The optimism comes in the wake of six straight months of year-to-year industrywide sales gains in the Japan market and reflects gains from Toyota's aggressive cost-cutting measures.

Toyota had already said that it expected to bounce back with its first profit increase in five years.

But last week, President Tatsuro Toyoda projected that pretax profit for the six-month fiscal period through December will be up 10 percent over the 130 billion yen, or $1.3 billion, that Toyota had forecast last August.

If realized, that would represent a 71 percent increase over the same period last year.

Spokesman Keisuke Kirimoto said the improved outlook results mainly from cost savings.

In August, Toyota forecast cost reductions of about $1 billion for the fiscal year, mostly through lower product development costs. That figure was not adjusted upward last week, but Kirimoto said a larger total will probably be achieved.

The company forecast a 10 percent increase in its domestic sales for calendar 1995, to 2.24*million units, and an 18 percent increase in overseas production, to 1.25 million. The higher offshore production primarily reflects a scheduled increase at Toyota Motor Manufacturing in Georgetown, Ky., but also includes increases in Asia and the Middle East.

But the company predicted a 3 percent decline in domestic production to 3.42 million, during 1995, and a 17 percent drop in exports to 1.25 million. Still, combined global production is projected to rise 2.4 percent over the estimated total for 1994.

While exports of built-up vehicles are falling, Toyoda maintained that the shift had the effect of increasing overcapacity in Japan. He cited rising component exports, including engines, transmissions and knockdown kits, as an offsetting factor.

You can reach Richard Johnson at

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