Toyota Motor Corp.'s highest-ranking executive in the United States said Thursday that he hoped the automaker would start earning money here again next year after its unexpectedly deep slide into the red.

Yoshimi Inaba, a former U.S. sales chief recently rehired by Toyota, said he was seeing signs that demand in the U.S. auto market was picking up and was confident about its long-term prospects. "I'm a very firm believer that this market will bounce back sooner or later," said Inaba, the New York-based chairman and CEO of Toyota Motor Sales USA as well as president and chief operating officer of Toyota Motor America.

Speaking with reporters this week for the first time since his return to North America, Inaba said his goal was to help Toyota's new president, Akio Toyoda, decentralize management, giving more authority to individual regions to speed up decision-making and respond better to customer demands.

Under a new command structure at Toyota, Inaba says proposals will no longer go through time-consuming approval processes by multiple departments in Japan. More decisions will be made locally, he said, and others will be made by a smaller number of executives, including Atsushi Niimi, the Japan-based executive vice president recently put in charge of North America, and Toyoda.

"The very strong intention is to regionalize the decision-making so that most decisions can be made with fewer people, with fewer departments involved," Inaba said.

Inaba, who headed Toyota's U.S. sales operations from 1999-2003, is returning to very different conditions. Toyota is struggling with plunging sales, excess production capacity and financial losses in what was once its most lucrative market.

Toyota lost $4.3 billion last year, including a $7.7 billion loss in the three months ended March 31, the first quarter of the Japanese fiscal year. The company -- which hadn't reported an annual loss since 1950 -- has forecast a loss for this year, too.

Asked when Toyota expected its U.S. business to return to profitability, Inaba said, "Not this year, but there's hope that we could make it next year, which is very, very challenging." He was referring to the next Japanese fiscal year, running from April 1, 2010, through March 31, 2011.

In his visits to various regions of the country, Inaba said he was hearing from dealers and others that "there's a little bit of pulse."

More people are dropping into Toyota showrooms, he said, and the imminent cash-for-clunkers program appeared likely to further stoke demand. "I came at the best timing," Inaba joked. "The market could not get any worse."

He said a recovery to an annual sales level of 12 million to 13 million vehicles "is not going to take too much time. But to come back to 16 million-17 million will take a longer time."

The recent plunge in the U.S. market's selling rate to less than 10 million units drove Toyota's U.S. manufacturing operations below their break-even level, but Inaba said weak demand wasn't the only factor behind Toyota's poor recent performance.

He is now reviewing all facets of the operation. "We have to see where we could have done better," he said.

Toyota faces many challenges now: a perception that its cars are solid but not exciting, rivals that have narrowed the quality gap, and excess production capacity in North America that is driving up costs.

General Motor Co.'s decision to abandon its half of the 25-year-old New United Motor Manufacturing Inc. joint venture with Toyota in Fremont, Calif., poses a dilemma. Inaba reiterated that the company had to seriously consider dissolving the venture.

Toyota said Thursday that it had initiated talks with Motors Liquidation Corp. -- which handles the "old GM" assets left in bankruptcy -- about the venture.

But Toyota denied reports that it has decided to liquidate its stake in Nummi.

Toyota also is mulling when to open a partly finished plant in Mississippi and what to produce there.

But the automaker wants to increase local production, Inaba said. Its regional production now accounts for about 60 percent of its U.S. sales.