UPDATE 1-Toyota says uncertain if US market has hit bottom

(Adds detail, quotes from second executive, byline)

By Soyoung Kim

NEW YORK, Sept 5 (Reuters) - Despite signs of steadier U.S. auto sales in August, it remains uncertain whether industrywide sales in the largest vehicle market have hit bottom, and conditions next year are unlikely to improve, senior Toyota Motor Corp executives said on Friday.

"It's hard to say whether the U.S. market has hit bottom," Toyota (7203.T: Quote, Profile, Research, Stock Buzz)(TM.N: Quote, Profile, Research, Stock Buzz) Vice Chairman Kazuo Okamoto said at an event hosted by the Japanese automaker for financial analysts in New York.

Okamoto, speaking through a translator, also said that despite the recent decline in oil prices, Toyota was still assuming oil prices would be higher over the long term, as the basis for its product planning.

The sharp decline in U.S. auto sales this year, prompted in part by record gasoline prices, caught Toyota and other major automakers by surprise.

Toyota, which has overtaken General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) as the world's largest automaker and Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) as No. 2 in the U.S. market, has seen its U.S. sales drop 8 percent through August.

The overall market was down 11 percent through August.

Coupled with a downturn in Western Europe, the ongoing decline in the U.S. market forced Toyota to cut its forecast for its worldwide 2009 vehicle sales late last month.

Toyota does not expect 2009 U.S. industry sales to show an improvement from this year's tally, a second executive said.

U.S. auto sales totaled just below 16.2 million units in 2007, and a year ago Toyota had been looking for a sales gain this year.

But record gasoline prices, tighter credit and a slumping housing market combined to send industry-wide sales lower, particularly for heavier SUVs and trucks, like the redesigned Toyota Tundra.

Jim Lentz, Toyota's sales chief for North America, said the automaker now expects full-year 2008 U.S. industry sales to be just above 14 million units -- assuming that sales for the remainder of the year hold up at the levels posted in August.

"Our ongoing assumption is it will be flat from this year," Lentz told Reuters when asked about Toyota's outlook for 2009.

Toyota has been running through a glut of unsold Tundra pickup trucks after taking the unusual step of shutting down production of the truck for three months beginning in August.

Lentz said he expects inventories of the Tundra to drop to near a 45-day supply by year-end, from 67 days in August. That decline in inventories would put Toyota in a good position to launch the 2009 model of the truck, Lentz said.

The Tundra represents Toyota's attempt to break into the market for full-size pickup trucks, which is still dominated by Detroit automakers. The Japanese automaker had called plans for its expanded production of the Tundra in the United States its most important vehicle launch ever. (Reporting by Soyoung Kim, writing by Kevin Krolicki; editing by Jeffrey Benkoe and Gerald E. McCormick)