Toyota Motor Corp., seeing tougher road ahead, cuts 2009 sales forecast

That may be changing.

On Thursday, Toyota Motor Corp. said it was cutting its worldwide sales forecast for 2009 by 7%, to 9.7 million cars and light trucks. And although a bleak U.S. sales picture is mainly to blame, 300,000 of the revision comes from international markets, including a 150,000 cut in Asia, which has been among the world's fastest-growing regions in recent years.

Other indications that growth in countries like China and Brazil may not keep up its double-digit pace could have grim implications for automakers. Toyota, Volkswagen AG, General Motors Corp. and Ford Motor Co. have bet heavily on emerging markets in recent years, boosting production and marketing to catch a piece of the action.

GM, for example, now relies on foreign markets for about 59% of its sales by volume, with a substantial portion of that -- and nearly all growth -- in emerging markets.

"The developing world is not going to keep up the frenzied pace we've seen," said analyst Rebecca Lindland of research firm Global Insight.

Her company predicts that the volume of car and light-truck sales in South America, which increased 27% last year, will grow 13.5% this year and just 6% in 2009.

Russia, up 31% in 2007, is on pace for 27% growth this year, but Global Insight predicts it will reach only 12% next year. And Eastern Europe, another hot spot, should see 13% growth this year, down from 18% last year, Lindland said.

But in the U.S., Global Insight forecasts auto sales will decline 10% this year and 2% in 2009.

Experts point to a variety of reasons for the emerging slowdown. First, many of the problems facing the U.S. economy are affecting other economies as well -- and in some cases even more dramatically. Some countries, including Argentina, are being hit by double-digit inflation, while others are known for economic and monetary policies that are unfavorable to foreign investment.

Additionally, the unpredictable nature of developing economies, from unstable governments to reliance on high prices for commodities and raw materials, makes any long-term bet hazy.

"Russia is flush with cash because the price of oil is high," said Peter Morici, a business professor at the University of Maryland and former chief economist at the U.S. International Trade Commission. "But if the price of oil doesn't keep going up, the growth won't be there anymore."