He reiterated the world No. 2 carmaker's goal of boosting European sales to 980,000 units this year from 916,000 in 2004.

"I think Toyota can grow without having to resort to incentives," he said.

Athanasopoulos said the hot-selling Prius, its new Czech-made Aygo small car and the Corolla Verso should help power sales growth in Europe this year. Its established network in central and eastern Europe would also help sales at a time when overall western European markets are stagnating.

Still, he said, Toyota has room to carve out more market share in big western markets, where it is a relatively small player.

Including its luxury arm Lexus, Toyota boosted its western European market share to 5 percent in 2004 from 4.8 percent in 2003, according to statistics from the ACEA car industry group.

Toyota is targeting young buyers for the first time with the Aygo, made at a Czech joint venture with France's PSA

New diesel engines made by its plant in Poland and due to arrive by May will also help it close the gap on rivals in the European market, he said.

Diesel accounts for around 36 percent of Toyota sales in Europe versus some 45 percent for the European market.

Athanasopoulos said Toyota's European operations were unaffected by the strong euro because it is invoiced in euros by suppliers and its parent company.