Toyota Projects Gas Prices To Hit $5.00 By Middle Of Next Decade, We Think They're Being Optimistic

Toyota is basing its production plans on projections that US gas prices could rise as high as $5.00 a gallon as soon as 2015. The Japanese automaker also believes the full-size truck market will experience a significant recovery in the near future. Despite demand for its fuel-efficient Prius hybrid reaching an all-time high, it is unable to increase production of the vehicle until the 2011 model year. But gas hit $4.00 a gallon earlier this year: It seems unlikely that it'll take seven years for it to rise another dollar, so is Toyota being too optimistic with its projections?

Bob Carter, general manager for Toyota Motor Sales U.S.A., made the projections in remarks to reporters at and industry conference yesterday. Going on to say that while he expects total full-size truck sales to drop to 1.45 million in 2008, from 2.14 million in 2007, he expects those sales to rebound.

"We are absolutely confident that the recovery will take place, it's just arguable when," Carter said. "We've reduced production. It's our intention to build to the market. But when that market comes back, the core buyer who uses the truck for employment, who uses it for work, whether it's the landscaping company or the contractor, can't substitute a Corolla or a Yaris."

But they could use a smaller, more fuel-efficient truck. Carter does expect to see a significant reduction in demand amongst recreational truck buyers — the kind of people who buy big trucks because they want them, not because they need them for work.

A new 2011 Toyota Prius is in the works, as is a new plant in Mississippi that will be capable of producing a significantly higher number of the hybrids. But until then, Carter says, "In the short term after having that kind of increase last year and a big increase the year before that we're restricted on capacity and components." But with a new Honda hybrid on the way, maybe priced as low as $18,000, and the Chevy Volt scheduled to arrive as early as 2010, that may not be enough — especially if fuel prices hit the $5-per-gallon figure earlier than Toyota is projecting. [Automotive News, Sub. Req.]