DETROIT (Reuters) -- Toyota Motor Corp. is targeting a return to profitability in North America as soon as the next fiscal year, the newly appointed head of the automaker's U.S. operations said today.
Yoshi Inaba, who is president and chief operating officer of Toyota North America, said the automaker had completed the process of reducing vehicle inventory to adjust to sharply lower U.S. demand and was focusing on steps it can take to reverse recent losses.
"There's hope that we could make it next year, which will be very, very challenging," Inaba told reporters when asked how quickly Toyota could return to profitability in North America.
Inaba was referring to Toyota's upcoming fiscal year, which begins in April 2010 and concludes in March 2011.
"I realize I set a very hard goal," he said.
Inaba also said Toyota wanted to increase the share of its vehicles sold in the U.S. market that are manufactured in North America from the current level of nearly 60 percent.
That could happen in part by bringing production of the Prius hybrid or Scion or Lexus models to the United States, he said. Currently Toyota imports all of those vehicles from factories in Japan.
The United States has been Toyota's largest market and until recently its most profitable. Sales for the automaker's three brands, Toyota, Lexus and Scion, were off almost 38 percent in the first half of 2009, a slightly larger decline than the broader market.
Hurt by a global slump in demand that has driven industry-wide U.S. auto sales to the lowest levels since the early 1980s, Toyota is forecasting a second consecutive year of operating losses.
Inaba, a veteran of Toyota's operations in Japan, the United States and China, retired from the automaker in 2007. He was brought back as part of the management team installed by Toyota's new president, Akio Toyoda, about a month ago.
Inaba said Toyoda was determined to streamline decision-making at the company founded by his grandfather after nearly a decade of strong growth that made it the world's largest automaker.
"We want to make faster decisions with fewer people," Inaba said.
As part of an effort to reduce costs, Inaba said Toyota would be looking to build more models on a single assembly line while increasing the share of its production at U.S. factories to protect Toyota's results from the impact of a strong yen.
Inaba also said there were signs that the U.S. auto market was stabilizing after a brutal four-year downturn, including increased customer traffic at dealerships that he called a "pulse of improvement."
He said it was likely that U.S. auto sales would push back above an annual rate of 10 million units by the end of 2009 and be above 12 million in "a couple of years."
He said it remained uncertain when the U.S. market could return to the stronger sales rates above 16 million that had bolstered results across the industry earlier this decade.
"I came in at the best time in that the market cannot get any worse," Inaba said.
As of Thursday, Toyota had an inventory of 36 days supply of sales of vehicles on dealer lots. The total includes 33 days supply for trucks such as the Tundra pickup truck and 45 days for cars.
Inaba said those inventory levels had become so low that dealers were reporting difficulty getting vehicles they need and said that gave Toyota room to increase production.