Toyota (TM) has already cut its sales targets for its fiscal 2008 year. Now it is taking down its forecast for 2009. According to The Wall Street Journal, "Japan’s biggest car maker by sales volume said Thursday that it cut its world-wide sales outlook for 2009 to 9.7 million vehicles from its previous expectation of 10.4 million vehicles that it outlined a year ago."

The reality of the situation is that Toyota may never sell 10 million cars a year again. Ever.

The hopes of the auto industry are based on the idea that sales will rebound sometime in 2009 or 2010. Part of the foundation of the reasoning is that more people in China, India, and Latin America will buy vehicles. That may be true. It is unlikely to offset the trend of fewer and fewer sales in Europe, North America, and Japan.

For any improvement in the regions which are suffering now, gas prices would have to drop dramatically. That probably means regular fuel would have to move back in the direction of $2 a gallon. Given the trend in oil prices, that is very unlikely.

Car companies also hope they can pick up sales from a new generation of hybrids and electric cars. Those models may be introduced too late to catch the people who are moving to public transportation, car pooling, and telecommuting. Once the new habits are in place, they will be hard to change.

The auto industry shot itself in the foot by failing to see higher oil prices coming. The wound may never heal entirely. Customers have gone elsewhere because they needed to save money. Some of them will stay away.

Douglas A. McIntyre

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