Toyota Motor Corp's new president, the grandson of the group's founder, warned that the auto industry faces two more tough years as he sketched out a roadmap to return the world's No.1 carmaker to profit.

Akio Toyoda, 53, took the helm two days ago amid a brutal global recession that has sent two of America's three big carmakers into receivership and is set to plunge Toyota deeper into loss.

"The new Toyota sets sail in very stormy waters," Toyoda told his first news conference in the job. "But right now we're working at full speed to cut costs and jump-start sales with the support of various government incentives being rolled out."    

"We want to do everything possible to avoid a third consecutive year of losses," he said, adding he would take a 30 percent pay cut for the first year.

Toyoda said Toyota's aim to slash fixed costs by 800 billion yen ($8.32 billion) in the year to next March was "only a starting point", vowing to steer the automaker at a pace that was more manageable and geared towards specific regional needs.

A new management structure would assign four of the five executive vice presidents to separate regions to enable speedier decision-making, he said.

Toyota will also drop its strategy of trying to be a full-line provider, and will instead offer products most suited to each region.

"Of course, we'd like to be able to provide everything to all our customers, but it wouldn't be right to do that now," Toyoda said.

Investors agreed Toyota had stretched itself too far and too fast in recent years.

"As the company acknowledges, it has gone a bit too far in leaning towards large vehicles as a profit driver and got a bit out of touch with consumer needs. In a sense, it's followed the footsteps of General Motors," said Shigeo Sugawara, senior investment manager at Sompo Japan Asset Management.

"I expect we have to wait at least five years for the auto market to fully recover, and that means Toyota will be left with excess capacity in that period unless its products can match consumers' needs."    

While reaffirming a back to basics policy, Toyoda said the company would aggressively seek opportunities in new areas such as Japan's vast used-car market by setting up a new domestic marketing company.

In Europe, it would shift focus to the hybrid sector, so as not to get "lost in the crowd", Toyoda said.

With its factories underused, and a promise to avoid plant closures, Toyota aims to cut costs further so it can be profitable using just 70 percent of its production capacity. - Reuters