Demand will be galvanised by a raft of next-generation product launches, which will lure buyers away from petrol and diesel.
Toyota is planning several initiatives, including an experimental launch of a fuel cell vehicle in December and a new hybrid vehicle in spring which promises to offer improved performance and greater fuel economy.
“This is a segment that we believe in - we want to be the market leaders,” says Toyota Motor Marketing Europe senior vice-president of sales and marketing Thierry Dombreval. By 2010 he believes hybrid cars could account for 10-15 per cent of European vehicle sales.
“It's an awareness issue. Only a minority of consumers recognise the benefits offered by hybrid cars, but this is similar to the early days of diesel when it was an unknown quantity,” adds Dombreval.
Toyota expects to sell 750,000 cars in Europe this year, up from 660,000 last year due to the success of the Yaris and the new D-4D diesel engine. Corolla sales will double on the back of the hatchback Verso.
“The way the business is developing and the product we have to come, Toyota has a long-term ambition of one million-plus sales.
“This is realistic by 2010,” says Dombreval.
The company's next milestone is to reach 800,000 sales by 2005 - which it believes is possible a year earlier than planned, particularly as European production is set to rise next year at the plants in the UK (Burnaston, near Derby), France and Turkey.
A fourth European assembly plant is also being considered to meet rising sales.
In 2005 the company will enter the sub-B sector - “a further growth opportunity” - with a model smaller than and priced below the Yaris.