Toyota, the Japanese car maker, yesterday bucked the global gloom in the automotive industry by forecasting a surge in sales and earnings this year.

"There are signs that the global economy will recover in the second half of this year after the war in Iraq and the spread of Sars hit the first six months," Fujio Cho, president of the world's third largest car group, said.

Toyota is forecasting a 6% rise in global sales to 5.85m, with overseas sales up 7% and output 19% higher as it switches more production to regional markets.

In Europe, where sales this year are expected to be 790,000, compared with 755,000 in 2002, Toyota now expects to sell 1m cars long before its original target of 2010. A new Czech plant shared with Peugeot Citroën will produce 100,000 cars a year from 2005.

The manufacturer, which began exporting Avensis cars to Japan from Burnaston, Derbyshire, last weekend, is introducing a third shift at the British plant, next year to boost output from 220,000 vehicles this year to 270,000.

Its fortunes, likely to include a seventh successive record year of European sales, contrast sharply with those of General Motors, Ford and DaimlerChrysler.

Daimler is expected to announce a collapse in second-quarter earnings tomorrow.