Toyota is selling so many cars in Europe that its suppliers cannot keep up with production demand, a top company executive says.

The Japanese automaker’s first quarter European results are far better than the company expected with sales of 260,508 units – up 23% on the previous year, Automotive News Europe said.

Toyota forecasts western European sales of 860,000 for 2004. But the automaker believes it would sell more if it could boost production at its plants in Japan, France, the UK and Turkey.

“We could sell more cars but cannot build enough to meet the demand because our suppliers cannot keep up with us,” said Tokuichi Uranishi, Toyota board member responsible for Europe.

Toyota was western Europe’s top-selling Japanese brand last year with sales of 677,725 vehicles, ahead of No. 2 Nissan’s 409,511 units.

Toyota aims to sell 1.2 million cars a year in Europe by 2010.

The company aims to grab sales from volume western automakers such as Volkswagen, Opel and Ford. It is also targeting luxury carmakers such as BMW and Mercedes-Benz with its Lexus brand.

Toyota executives expect Lexus sales in western Europe to increase to between 60,000-80,000 units a year from a forecasted 22,500 this year.

Toyota will boost sales without offering incentives. Uranishi said the company will rely on quality and a good price performance.

Toyota believes its hybrid models will become more price competitive against diesel cars in Europe. The company expects the cost of diesel cars to increase as manufacturers are forced to add new technology such as particulate filters to meet future emission laws.