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SHANGHAI (Reuters) -- Toyota Motor Corp. raised its forecast for this year's vehicle sales growth in China to 40 percent from 33 percent, underlining strong prospects in the country for some of the world's largest auto makers.

The revised forecast came after General Motors said recently that it expected to beat growth, which it projects at 15 percent in 2007, in the world's second-largest auto market.

"Foreigners still have some good years ahead," said Matthew Kong, an industry analyst with Fitch Ratings. "Even though China's own-brand cars have started to take off, the market is still dominated by foreign players."

Japan's top automaker moved roughly 308,000 vehicles in China last year, up 68 percent from a year earlier -- beating its own expectations -- and expects to sell some 430,000 vehicles in 2007, a company executive told Reuters.

Last November, it had projected a 64 percent rise in sales for 2006, slowing to 33 percent in 2007.

That growth lagged a 86.6 percent jump in vehicle sales by Ford Motor Co. from a much lower comparative base, but outshone many rivals such as Honda Motor Co., which reported a mere 26 percent growth to 323,469 vehicles.

Leading players GM and Volkswagen AG had moved 876,747 and 711,298 vehicles here in 2006, respectively, up 31.8 percent and 24.3 percent from 2005.

Toyota, a relative latecomer in China, had also vastly outperformed the 30.02 percent expansion of the world's second-largest auto market, where 5.18 million cars were sold in the 12-month period.

That figure, provide by the country's national auto industry association, encompassed sedans as well as SUVs and multi-purpose vehicles.


Local and foreign auto manufacturers alike are racing to roll out new models to attract buyers as they strive to push sales in the fast-growing but fiercely-competitive market.

In May, Toyota, which already makes the Reiz and Vios models in China, rolled out its first Chinese-made Camry at a new plant in the southern city of Guangzhou to wrest customers from competing brands such as Honda's Accord.

Camry, the best-selling car in the United States in eight out of the past nine years, became an instant hit in China, racking up deliveries of 58,000 in six months, the Toyota executive said.

A Toyota spokeswoman said late last year that the firm would double production capacity at the Guangzhou facility to 200,000 units per year to keep pace with strong demand.

Some 80,000 units of the Corolla, popular among young professionals, moved in the whole of 2006, up 11 percent from a year earlier.

Other foreign auto giants have pledged to make more of their best-selling models locally to cash in on robust demand.

GM, which introduced its Cadillac SLS luxury sedan to China in 2006, plans to launch about 10 new or upgraded models this year.

Volkswagen will also soon churn out its Skoda Octavia and Magotan sedans from its two local tie-ups, while PSA/Peugeot-Citroen hopes to introduce six new models by 2009.

Toyota's capacity in China stood at about 342,000 units as of September last year. It had applied for approval to add an additional 200,000 units at the northern port city of Tianjin, near Beijing. Its Chinese partners include Tianjin FAW Xiali Automobile Co.
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