Auto sales hit by Asian currency instability

Auto sales hit by Asian currency instability

TOKYO (AFP): Japan's Toyota Motor Corp. president, Hiroshi Okuda, said yesterday a decline in Asian auto sales was inevitable following currency instability that has lashed Southeast Asian economies.

"Naturally, we are expecting a decline in auto demand because of the psychological worries caused by unstable currencies in Asia," Okuda told news conference.

"For the time being, our stance is to monitor the market, but we are not considering production cuts," he said.

Toyota is a leading auto maker in the region, with manufacturing plants in Indonesia, Malaysia, the Philippines and Thailand, all of which have been hit hard by currency speculation in foreign exchange markets.

Okuda said it was "still unclear" whether Japanese domestic auto sales would recover in July to levels of the previous year.

But he said that auto sales "are currently trending in such a way that there is the possibility of a recovery being delayed until August or September."

Okuda cited the adverse impact of the April 1 consumption tax increase on new car sales, as well as steps by auto makers to boost sales of used cars.

He said Toyota would continue to aim for 40 percent share of the domestic market for car sales in the year to March 1998 by focusing on "launching two to three new models after August."

Toyota is also planning to establish a representative office in Russia by the end of the year, but production there was unlikely to start soon, he said.

"Although we are currently exporting assembled cars to Russia through trading houses, we are currently considering the possibility of semi-knock down production in the next year or two," Okuda said.