In the first quarter Toyota achieved half its projected annual sales target for the Pruis hybrid -- 1,000 units.
The automaker had planned to sell around 2,000 units of the gasoline-electric model in Germany this year.
Markus Schrick, Toyota Germany managing director, said: "The vehicle's concept, design and engine are very successful."
He added that the hybrid technology has given the brand "a real boost."
Toyota Germany sold 33,500 autos in Germany in the first quarter, 30.4 percent more than in the same period last year. Market share rose to 4.3 percent from 3.3 percent.
It expects to sell another 33,000 units during the second quarter. That means that by the end of the first half Toyota Germany will have sold more than half of its 2004 target of 118,000 autos.
Schrick does not rule out adjusting the forecast upwards. "I can imagine that there will be a slight increase. We will decide by mid-2004."
He hopes to sell 200,000 cars a year in Germany by 2010 and expects market share to rise to more than 5 percent with Toyota winning customers from high-volume manufacturers Volkswagen, Opel and Ford.
Toyota's luxury brand Lexus also had a good first quarter in Germany with a sales increase of 54 percent with 650 sold automobiles. The sales target for the year is 2,500 units.
Lexus General Manager Frank Winter is pinning his hopes on the RS 400h hybrid SUV with 270hp, which will be launched in January. "We hope to sell 1,000 units in 2005 alone," he said.