Paris - The European head of the Japanese car maker Toyota said Thursday that he expected a gradual recovery next year, despite the fall in the American and European automobile markets because of the finance crisis.

"In the long term, the sales of compact cars will increase in Europe. But there will always be people who need large automobiles," Tadashi Arashima told Deutsche Presse-Agentur dpa.

Toyota has encountered problems on the German market because certain of its models were nearing the end of their cycles.

"But that will change next year," Arashima said. "The subcompact iQ and the Avensis will arouse much interest. Technologically, we will be much more competitive next year."

For next year, Toyota is looking to increase sales by about 200,000 units to 9.7 million vehicles.

The company is counting heavily on the low-emission iQ, as well as on its new generation of hybrid cars and on the developing markets in Brazil, Russia, India and China.