BY BRENT SNAVELY • FREE PRESS BUSINESS WRITER • October 4, 2008

In the wake of disastrous September sales figures, Toyota Motor Corp. has unveiled a 0% interest rate on eleven 2008 and 2009 Toyota-brand models for up to five years, including Camry and Corolla, its two top sellers.

"With the conditions we saw last month we thought this would be a great opportunity to bring customers back to the showroom," said Toyota spokeswoman Zoe Zeigler.

The move is a sign that the world's most profitable automaker has been hurt by the nation's economic crisis.

"The more Toyota becomes like General Motors, the more it has to rely on consumer incentives," said Art Spinella, president of CNW Marketing Research Inc.

Toyota's 0% offer varies by model, with terms ranging from 36 to 60 months, and is set to expire Nov. 3. Models covered include: Matrix, Corolla, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra. Toyota declined to say which models qualify for the longer terms, saying the offer varies by region.

Toyota has traditionally avoided extensive consumer incentives, and Zeigler said, "We don't anticipate becoming a manufacturer that is heavy in the incentive areas."

But in September, Toyota's sales dropped an eye-popping 32.3% as industrywide U.S. sales hit their lowest levels since 1993. Toyota said the housing crisis and gulf coast hurricanes hurt sales in many regions and the financial crisis on Wall Street squelched consumer confidence.

"They've got their hand on their wallets and they are not using their disposable income," said Don Esmond, senior vice president of automotive operations for Toyota's U.S. sales arm.

Vehicle Service Agreements

New Vehicle | Toyota Certified Used Vehicle | Used Vehicle

Toyota Financial Services offers three different vehicle protection plans for your new vehicle, all designed to help protect you from the costs of unanticipated repairs. Each offers a variety of extended service coverage options.

Toyota Extra Care new vehicle protection plans can be purchased at any time while your vehicle:

Is less than three years old1 and
Has fewer than 36,000 total miles, whichever occurs first.
New Vehicle Protection Plan Summaries

Platinum Protection2
Our highest level of extended service coverage for virtually every component group in your vehicle. Coverage terms range from 3 years/50,000 total vehicle miles to 7 years/100,000 total vehicle miles.

Gold Protection
Provides extended service coverage for most major components. Coverage terms range from 3 years/80,000 total vehicle miles to 7 years/100,000 total vehicle miles.

Powertrain Protection
Provides extended service coverage for engine, transmission, and axle-assembly components. Provides coverage for 6 years/100,000 total miles.

Protection Plan Comparison Chart
View details about Benefits, Components, and Pricing for all three levels of protection.

For more information, call 1-800-228-8559 or visit your Toyota dealer. To locate the Toyota dealer nearest you, use our dealer locator.

YORK TOWNSHIP, Michigan (Reuters) - Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) could extend an unprecedented offer of interest-free loans on most of its lineup but expects to be able to hold 2009 sales flat in a slumping U.S. auto market.

"We could," Toyota's North American sales chief Jim Lentz told Reuters on Thursday, when asked if the automaker plans to extend its zero-percent loan incentive beyond the November 3 expiry. "We will see how things are going."

Lentz, who sees the U.S. economy currently going through a recessionary period, said the $700 billion government bailout program would benefit the auto industry by helping improve U.S. consumer confidence.

"That will help improve the mood of the consumer and help consumer confidence, which is what drives our industry," he said.

Lentz, in the area to mark the opening of Toyota's new engineering and safety testing facility, said he expects the U.S. auto sales market to be about flat in 2009 overall and does not see any further decrease in the automaker's U.S. sales volume next year.

"We do not plan on having a decrease in volume next year," he said.

Toyota's U.S. sales are down 10.4 percent through the first nine months of the year.

The Japanese automaker began offering interest-free loans earlier this month on 11 of its models -- including its best-selling Camry and Corolla sedans -- in a rare move that followed a surprising 32 percent slide in its U.S. sales in September, its steepest drop in decades.

The offer, which is aimed at assisting buyers sidelined by the credit squeeze, has helped increase traffic slightly at Toyota dealerships, especially in southern California, Lentz said.

Toyota, along with every other major manufacturer, was hurt last month by the severe credit crunch that rocked U.S. consumer confidence, especially in the last 10 days of September.

U.S. industrywide auto sales plunged 26 percent in September and the adjusted annual rate of sales, a key figure watched by economists, bumped along at a 15-year lows.

Lentz had earlier told reporters that consumer confidence is the biggest challenge to Toyota right now as the U.S. goes through a downturn.

"I don't think we are losing business in our dealerships because of lack of credit for consumers," Lentz said.

The global credit crunch and turmoil in financial markets are affecting the automaker's business "more from a consumer confidence standpoint," he said.

Lentz said Toyota dealers were in good shape despite the difficult period, and he does not expect to see any of the automaker's retailers failing.

The U.S. auto market will see a recovery in sales in 2010 with further improvements in 2011 and beyond, he said.

Toyota sees the U.S. auto industry's annual sales reaching 17 million units again in the middle of next decade, he added.

"We are in the middle of the storm right now," he said, but he believed the future of the industry was strong.