Toyota said Tuesday it will produce hybrid cars in Australia, whose Prime Minister Kevin Rudd is trying to battle spiralling fuel prices and revive the country’s ailing auto industry.

Rudd met with Toyota Motor Corp. chief Katsuaki Watanabe at the auto giant’s headquarters in central Japan, as the two announced the company would build the Toyota Camry Hybrid by 2010 at an existing factory in Melbourne.

Toyota, which plans annual production of 10,000 vehicles, will benefit from a 35 million Australian dollar (37 million US) subsidy from Canberra to be used in research and development.

Rudd said increased popularity of the hybrid would help Australia cut back on emissions blamed for global warming.

“This hybrid will use one-third less petrol than a standard car, one-third less emissions and therefore for an average family … savings of up to 1,000 dollars a year,” Rudd told a joint news conference with Watanabe.

“Australia must do whatever we can to assist Australian motorists who are faced with the challenge of rising fuel prices and also… in our overall efforts to bring down greenhouse gas emissions,” he said.

Toyota, poised to overtake General Motors this year as the world’s top automaker, was the pioneer of hybrids, which deliver power by switching between a regular engine and an electric motor.

It primarily produces the hybrid in Japan but also in the United States and China. Toyota is expected to announce it will also build the vehicles in Thailand.

Rudd has called for a transformation of Australia’s auto industry, which has shed more than 11,000 jobs since 1996, by launching a 500 million (Australian) dollar fund to assist the development of green cars.

Australians buy one million cars a year and only 5,000 are hybrids, Rudd said.

“Australia needs to do better and more on the question of fuel-efficient vehicles,” he said.

U.S. auto sales in May brought the starkest signs yet that gas prices have dramatically shifted the market to smaller cars, as the top-selling Ford F-series truck was dethroned by cars from Toyota and Honda and as General Motors announced it was closing four truck and SUV plants after dismal results.

GM said Tuesday its sales fell 28 percent in May compared to a year earlier, with a 37 percent decline in truck and SUV sales and a 14 percent drop in car sales. At the automaker’s annual meeting in Wilmington, Del., Tuesday, CEO Rick Wagoner said GM will close four truck and SUV plants in the U.S., Canada and Mexico by 2010, affecting 10,000 jobs.

“We at GM don’t think this is a spike or a temporary shift,” Wagoner said of the drop in truck sales.

Ford’s sales fell 16 percent for the month, while Chrysler LLC’s sales were down 25 percent and Toyota Motor Corp.’s sales slipped 4 percent. Overall sales were down 11 percent compared to last May, according to Autodata Corp.

Honda Motor Co., riding the wave of customers seeking better fuel efficiency, said its sales rose 18 percent; a 36 percent increase in car sales made up for an 8 percent decline in truck and SUV sales.

Nissan Motor Co. said its sales rose 8 percent, with a 19 percent increase in car sales offsetting a 10 percent decline in trucks.

High gas prices, the weak economy and low consumer confidence are taking their toll on larger vehicles. Ford Motor Co. sales chief Jim Farley said small and mid-size cars made up 47 percent of sales in May, up from 34 percent in February.

The shift represents 1.5 million vehicles at Ford.

“May was a watershed month. We are, as an industry, catching up with the breathtaking choices customers are now making,” Farley said in a conference call with media and analysts.

The Toyota Corolla and Camry and Honda Civic and Accord sedans each outsold the F-series truck, which saw monthly sales plummet 31 percent in May to 42,973. F-series trucks have been the best-selling trucks in the U.S. for 31 years and the best-selling vehicles overall for nearly as long.

F-series trucks have also been the best-selling vehicles each month since June 2005, when the Chevrolet Silverado pickup took a brief lead, said Tom Libby, senior director of industry analysis for the Power Information Network, a division of J.D. Power. The last time a car topped the monthly sales charts was the Ford Taurus sedan in December 1992, according to Ford’s top U.S. sales analyst George Pipas.

Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor, said the U.S. market will likely look like the European one, where small cars make up nearly 40 percent of sales, in five to ten years. That shift could make it harder for the Detroit Three to win customers, he said.

“Only a few companies ever made really good trucks, but a lot of companies make good little cars,” he said. “The competition level is going to go up, way up.”

Ford’s U.S. car sales were up 3 percent compared with last May, and it sold more than 30,000 Ford Focus small cars for only the second time in the car’s nine-year history. But pickup and SUV sales dropped 26 percent. Farley said the company plans to offer an employee-pricing discount on F-series trucks this summer to clear out inventory before the new F-series arrives this fall.

Ford said last month it plans to slash North American production of trucks and SUVs for the rest of the year. Ford also is planning to lay off salaried workers as part of a restructuring plan that will be detailed next month.

Toyota’s U.S. sales dropped 4 percent for the month, as flat results for cars were dragged down by a 12 percent decline in trucks and SUVs.

Chrysler said car sales fell 33 percent and truck sales were down 22 percent despite an incentive program that lets buyers lock in gas prices at $2.99 per gallon. Chrysler said the decline was mainly due to a 40 percent cutback in sales to rental car companies and other fleets.

Steven Landry, executive vice president for North American sales, said the $2.99 gas incentive has lured people into dealerships and will be continued through July 7. He said between 5 and 10 percent of buyers are choosing the fuel guarantee over other incentives.

Landry said May’s sales figures were sobering for the industry.

“This month is one that particularly lets us look deep into the numbers and determine our game plan for the rest of this year,” he said.

Mark LaNeve, GM’s vice president of North American sales, said earlier forecasts for an improvement in the second half of the year now look overly optimistic. But GM does think sales are hitting their low point now.

“We still think we’re somewhere near the bottom and we look for a firming up and a gradual recovery beginning in the back half of the year,” he said.

GM shares rose 14 cents to close at $17.58. Ford shares rose 4 cents to $6.68, while Toyota’s U.S. shares fell 22 cents to $102.29.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 27 sales days last month and 26 in May 2007.

We got to see Toyota’s iQ in production form at the last Geneva Motor Show, and so far, we like what we see. We’re still waiting for specific details regarding what will power the “small yet premium ” 3+1 and whether or not it’ll make it over to the states. Already, though, we are hearing that there could be a larger version of the vehicle built on the same platform. Doesn’t that defeat the whole purpose? Maybe, but it could also help Toyota to defray the cost of the vehicle, which shares no major components with other Toyota models. The larger model could allow Toyota to compete with both the smart fortwo and the Mini, not to mention VW’s upcoming up!.

In other iQ news, Toyota is reportedly not planning on adding a hybrid option to the iQ, instead relying on a choice of two gas and one diesel-powered engine options. The reasoning behind not offering a hybrid relates again to the size of the vehicle. There’s just no room to store a battery. Plus, the battery would add too much weight to the little car. Stop/start, though, is expected to make an appearance here.

Toyota through its sole agent PT Toyota Astra Motor (TAM) won 33.25 percent of car sales in Indonesia in the first quarter of 2008, the company`s president director Johnny Darmawan said here on Monday.

In the first quarter of this year the total car sales in Indonesia were recorded at 135,607 units or an increase by 60.8 percent if compared with the same period a year earlier.

Johnny said that Toyota led the market for all non-commercial vehicle (non-passenger) types such as sedan cars, multifarious vehicle (MPV) and sport vehicles (SUV).

“In the first quarter, we succeeded not only in maintaining our position as a market leader but also in leading all market segments for non-commercial vehicles,” he said.

On the sedan car segment, TAM controlled 41 percent of the sales with 3,548 units while on the 4×2 segment Toyota car was leading with a sale of 37,306 units or 43.1 percent, he said.

The same was also true to the 4×4 market segment, Toyota was leading with a market sale of over 40 percent.

In the first quarter of 2008, Toyota`s sales for Vios and Limo cars which were included in the mini-sedan segment reached 1,410 units (28.6 percent) and 545 units (11 percent) respectively.

The sales of Corolla and Camry which were included in the middle sedan car segment were recorded at 827 units (47.2 percent) and 763 units (46.7 percent).

“TAM`s sales of sedan cars increased 308 percent compared with those in the corresponding period last year. The increase exceeded the national sedan car sales level which rose 177.3 percent,” Johnny said.

The sales of Toyota sedans were ranked first with a market share of 41 percent, followed by Honda (31.8 percent) and Suzuki (14.3 percent).

In the 4×2 (MPV) segment, Toyota led the market with a controlled share of 43.1 percent, followed by Suzuki (15.5 percent) and Daihatsu (14.7 percent).

“In this segment, the highest sales remained with those of Avanza mini buses (16,158 units) and Kijang Innova (14,033 units). It was followed in the third place by Daihatsu Xenia with a sale of 7,778 units,” he added.

There was some alarm a couple of weeks ago when Toyota Motor Co. announced that it was cutting back on production of its Tundra truck and Sequoia sport utility vehicle.

If the Japanese automaker is cutting production, does that mean that the $1.3 billion plant it’s building in Northeast Mississippi is in danger of being scuttled, some wondered? The mid-sized Highlander SUV will be built at the Blue Springs plant, so some of the worried thinking was that a ripple effect could mean potential problems with building the plant.

Rest your fears - that isn’t happening, barring a complete collapse of the auto industry and an implosion of the world’s second-largest automaker.

So why cut production of the Tundra and Sequoia? While sales of the hulking vehicles are higher than a year ago, Toyota expects demand to slow. Given the higher gas prices and other economic worries the move is in anticipation that consumer spending will pull back on big-ticket items.

Tundra sales were, in fact, nearly 17 percent higher in March than a year earlier. Sequoia sales were up nearly 20 percent. So it’s not like the bottom was falling out. However, total Toyota SUV sales - which include the FJ Cruiser, 4Runner, Highlander, Land Cruiser and Sequoia - were down nearly 20 percent in March and 15 percent for the year.

Highlander sales, by the way, were down 0.2 percent in March but were up more than 7 percent for the year.

And while Toyota will be trimming production, it’s not laying anybody off.

Other automakers off, too

But Toyota wasn’t the only automaker to post a less-than-stellar truck and SUV sales in March.

GM’s truck and SUV sales dropped 22 percent in March; its Hummer brand sales were down 29 percent.

At Ford, sales for trucks and large SUVs fell 17 percent. Even its popular F-Series pickup, the best-selling truck for 31 years, were down 24 percent.

Chrysler’s light truck sales fell nearly 22 percent. Its Jeep brand had sales drop 12 percent.

Honda’s truck and SUV sales declined 12 percent.

Nissan’s truck and SUV sales dropped 20 percent. The company’s Titan pickup plummeted 45 percent while its Armada SUV plunged 43 percent

Auto analysts say - no surprise - that small car sales are faring much better, with four-cylinder vehicles gaining in popularity.

Will auto sales improve? Some automakers are hopeful that the economic stimulus package that consumers will be getting in the next few months will spur buying.

Some rough months likely are still ahead for the industry before it gets better.

But thankfully, the building continues in Blue Springs. And in Dorsey and Baldwyn.

Toyota Motor Corp and General Motors Corp are recalling more than 662,000 vehicles sold in the United States due to defects in power windows, the two companies said on Wednesday.

Toyota will recall 539,500 Corolla and Matrix vehicles for the 2003 and 2004 model years, it said in a statement.

GM said it would recall 122,598 Pontiac Vibe hatchbacks, which share the same platform with Toyota’s Matrix and are built by GM in a joint venture with the Japanese automaker.

On vehicles equipped with power windows, the driver and front passenger glass bolts may loosen and cause the door glass to separate from the window regulator, Toyota said. Vehicles equipped with manual windows are not subject to the recall.

Toyota will notify vehicle owners by mail, beginning in late April. It advised owners to contact their local Toyota dealer for inspection and repairs.

Replacement of the driver and front passenger door glass bolts will be done at no charge, Toyota said.

Toyota has so far resisted expanding its dealer body in the wake of the Japanese automaker’s unprecedented climb up the sales charts. In eight years, Toyota has gone from having 15 million of its vehicles on the road to 22 million today. So far dealers have been able to keep up with the torrid sales pace, but at the service end, dealerships are busting at the seams. In an attempt to alleviate some of that pressure for landlocked dealers, Toyota has piloted off-site service centers and oil change centers. The early results show that the nine dealers in the pilot received significantly more customer pay (non-warranty) repairs than the average Toyota dealership, which translates into more money for the dealer.

For Toyota owners near dealers with satellite shops, this means your car or truck will be fixed in a more timely fashion, and 15,000-mile checkups won’t land you on a three-week waiting list. We totally understand why Toyota doesn’t want to have more dealerships, but the added service capacity is a no-brainer. Making Toyota owners wait weeks for needed repairs is just bad business.

Toyota has cautiously told the automotive world the Celica will make a European comeback in 2009.

Markus Schrick, vice president of Toyota Deutschland was speaking to Automobilwoche about the possibility of speed restrictions on the autobahn before breaking the news.

Mr Schrick said Toyota plans to introduce a replacement for the Celica sport coupe in Europe in 2009. The Celica - which had the reputation of being  a hairdresser’s car by the end - was discontinued worldwide in 2005.

Having launched the TRD brand in Australia backed up by a massive marketing campaign, it seems that Toyota has listened to the calls of millions. The brand desperately needs sports cars outside of the Japanese market to improve its image.

Lexus - Toyota’s luxury division - will soon introduce the IS-F which will become the company’s flagship performance model. Toyota is also working on a new Supra, rumoured to be hybrid-powered.

Toyota’s presence at the Detroit auto shows past has trumpeted its big, big, big trucks and SUVs, from the new Tundra to the Sequoia. But this year coming, with fuel-economy rules changing, Toyota is staking out some greener territory with a concept pickup truck derived — like Honda’s Ridgeline — from passenger-car running gear.

The A-Bat concept, Toyota says, returns the company to its compact truck roots. Penned at the company’s southern California design center, CALTY, the A-Bat sits on a unibody architecture and uses a version of Toyota’s Hybrid Synergy Drive system for “excellent fuel economy,” Toyota says.

The A-Bat is smaller than Toyota’s mid-size Tacoma pickup, which is based on a traditional ladder frame. Toyota says the smaller dimensions and car-based running gear would give a production version of the A-Bat more car-like handling and a smooth ride. The concept sits on 19-inch wheels for a dash of truck tougness.

The most important feature, the truck bed, is a four-foot affair with a flexible pass-through that adds another two feet to the bed. The putative 4×8 sheet of plywood will fit in the A-Bat, and taller cargo can ride in the cabin, poking through a sliding panel. The bed also includes formed-in lighting, a first aid kit and flashlights, as well as an AC power outlet. The bed panels slide around to expose more storage areas, and the bed floor also slides to expose a storage drawer, like Honda’s Ridgeline has its storage locker below the bed.

The A-Bat’s cockpit is more unconventional than, say, a Dodge Ram Mega Cab. A center console incorporates an AC/DC portable power pack that can be used to run tools, computer or even give a jump start. Carbon-fiber-look trim is teamed with rim on the doors and instrument panel than can be personalized. And the four-seat cabin offers flexible seats that fold down for bed space, or retract beneath the cargo bed entirely.

High-tech features in the concept include a portable navigation system, wireless internet, a music hard drive, and solar panels on the roof that capture energy and use it to charge the navigation system and power pack.