Toyota revises upward its Europe sales target

Toyota is revising upward its European sales targets, starting with a goal of 1.2 million sales in 2022 and increasing to about 1.5 million in 2025, Toyota Europe CEO Matthew Harrison said. 

Toyota Europe's region includes Russia, Turkey, Israel and Central Asian countries in addition to European nations.

Sales in the first quarter were up by 6.6 percent to 287,678, the automaker said. First-half sales were about 600,000, Harrison told Automotive News Europe in an interview.

• Click here to read the full interview with Toyota Europe CEO Matthew Harrison

Even with the semiconductor shortage and continued effects of the COVID-19 pandemic, Toyota will surpass its original target of 1.1 million sales for the year, Harrison said.

"Both of those situations have turned out to be worse than we thought," he said. "Despite that, with 600,000 sales in the first half, we are 30,000 sales ahead of our original plan, and we have a record 6.8 percent market share for Toyota and Lexus [combined]."

"Demand is strong and we are in a much more favorable position than I could have dreamed of at the start of the year or at the end of the first quarter," Harrison said, "so we have updated our sales forecast and we are now projecting 1.2 million sales."

Looking to 2025, Toyota Europe in January 2020 had originally forecast 1.4 million sales, but that target has also been moved up, to 1.5 million. That figure represents growth of 25 percent. 

Harrison said Toyota would benefit from the launch of new models, starting with the Yaris Cross small SUV this year, as well as continuing strong sales of models such as the Yaris small car, which was Europe's top-selling passenger car in January, outselling the Volkswagen Golf during the month. The Yaris was third overall in first-half sales behind the Golf and Peugeot 208, according to JATO Dynamics

"All of our core models are performing extremely well," he said. "It's not just Yaris, but in the compact segment Corolla demand is strong and ahead of plan, and the C-HR is holding its own extremely well, despite the competition in the C-SUV segment.

The Corolla was one of only a few models to gain sales in 2020, up 2.9 percent to 136,911, according to market researcher JATO Dynamics. It ranked fourth in the compact-car segment.

"And even Aygo [minicar], which is at the end of its life cycle, is delivering 10 percent plus share as competitors have exited the segment," he continued.

Larger market forces are also at work that will benefit Toyota, he said.

"Things are changing faster than we thought," he said. "There's more consolidation, as we have seen with the creation of Stellantis [from the merger of PSA Group and Fiat Chrysler], and the speed of electrification – and the financial challenges that come with that – are causing a number of our competitors to behave differently."

Some of Toyota's mainstream competitors such as Renault are focused on profitable segments and sales channels rather than volume, and have announced a scaling back of their sales ambitions. 

"There is less volume being pushed through rental channels or excess capacity being utilized and then liquidated in the market," said Harrison, who was head of sales and marketing at Toyota Europe before his promotion to CEO.     

At the same time, Opel has purged its lineup of slow-selling or high emissions models – with a corresponding drop in sales – since its 2017 acquisition by PSA, and Nissan's European sales have dropped sharply as it refocuses on the North American and Asian markets.

"Most brands are much more focused on generating cash and profit for the challenges that lie ahead, and that's enabled us to make more progress in terms of market share," he noted said.

By 2030 Harrison said he expected Toyota's market share in the expanded Europe region to be 7 to 7.5 percent, although he declined to give a sales target.

The automaker's market share in its Europe region was 6.6 percent in the first quarter.

In the EU plus UK plus EFTA countries (Iceland, Liechtenstein, Norway and Switzerland,), Toyota's market share grew to 6.3 percent from 5.9 percent in the first half of 2021, according to indutsry association ACEA, with Toyota brand growing to 5.4 percent from 5 percent.

In the same period, Hyundai-Kia saw its share grow to 7.6 percent from 6.9 percent, while Renault Group's share fell to 8.6 percent from 9.9 percent. Volksagen Group remained the largest automaker, with share growing slightly to 26.2 percent from 25.3 percent. Stellantis, in its first half of operations, had a 21.3 percent share, compared to a combined PSA/Fiat Chrysler share of 20.5 percent.