New car sales in the UK may not recover for five years, Toyota GB managing director Miguel Fonseca has warned.

He suggested the government should consider tax incentives to “put some life” into the used car market as happened in Spain and Italy during the last recession.

“My belief is that it will take five years for new car sales to return to where we were last year at pre-credit crunch levels,” he said.

Speaking in Milan at the European launch of the new UK-built Avensis D-segment line, he emphasised this was a personal belief based on his experience working in the UK and other countries for Toyota and, previously, Ford.

“We have our forecasts for the next 24 months, but it is very difficult to forecast further. After two years I think there will be a slow recovery, but my own belief is that it will be five years before we are back where we were.”

Fonseca estimated UK new car sales in 2009 at around 1.7m, down from 2.34m in 2007, but warned “this is the top end of our window.”

“We have to adjust our cost base to this new reality,” he said.

But he suggested the government ought to follow Italy and Spain during the last recession when there were incentives to scrap cars.

“In Spain in the 1990s they gave a fixed amount – EUR1,600 – if you scrapped a car over eight years old. It came as tax relief when you registered a new car.”

Toyota GB will launch an unprecedented six new model ranges next year, including the redesigned Prius petrol-electric hybrid, as well as revamping five others.

“These difficult market conditions will be an opportunity for us to gain market share as other manufacturers weaken but our total sales are not likely to increase.”

Toyota, he said, would use its financial strength to ensure credit was available for buyers.

Access Toyota, a personal contract purchase plan, would offer a new car every two or three years.

“This will make cars more accessible and protect dealer profit margins rather than discounting. We will not push volume, but we will protect our dealer network. That is our key role.”

Burnasaton, Derbyshire is the sole global plant for the Avensis and spends about GBP500m a year with UK suppliers.

Toyota expects to sell about 115,000 Avensis models in Europe next year, including 13,800 in the UK.

More than 1.4m Avensis have been made at the factory since 1997. It replaced the Carina II [aka Corona] line that launched UK production in 1992.

Production of the Auris [aka Corolla] hatchback at the factory has been reduced by the stoppage of the night shift until next March, though there have so far been no redundancies at the plant which employs 4,000 people.

Russell Bray