Hard times are coming, predicts the world's largest automaker. Toyota - which captured the global sales crown from struggling General Motors during the first half of 2008 - has lowered its global sales forecast for the year, largely because it expects its first annual decline in the critical U.S. market in nearly two decades.

Last year, Toyota officials threw down the gauntlet when they predicted they would sell 9.85 million vehicles worldwide. At the time, most analysts responded by forecasting that would be enough to push the Japanese maker into the No. 1 slot. But no one counted on the slump in the U.S. and the general stagnation in many other developed markets, notably in Europe.

Now, says Toyota, it expects global sales to reach 9.5 million, this year, about 1 percent more than in 2007. But in the U.S. market, the company said in a brief statement, it will suffer its first sales decline in 17 years. When you combine the Toyota, Lexus, and Scion brands, volume is expected to total 2.44 million cars, trucks, and crossovers, compared with 2.62 million in 2007 - and the original, 2008 forecast of 2.64 million vehicles.

Toyota's 6.8 percent sales slump in the U.S. so far this year is complicated by a variety of factors. There's no question it has been hurt by the sudden, sharp decline in the American light truck market. The Japanese maker has ordered a months-long shutdown of its new Tundra pickup plant in San Antonio, and will pull additional production of the full-size truck out of another factory in Indiana. It has delayed the launch of a new plant that was supposed to build the Highlander SUV - but it will add production, there, of the popular Prius hybrid.

In fact, many analysts believe Toyota could be doing better in the States if it had more hybrids and small cars to sell. There are long lines waiting for the Prius in most of the country, and dealers typically sell the hybrid vehicles the moment a shipment arrives from the factory.

The U.S. isn't the only place Toyota is struggling. It is projecting a very small downturn in the home Japanese market for 2008. On the other hand, such slowdowns have been offset by robust demand in key emerging markets, including China, where Toyota has steadily been pushing its way into the top tier of import nameplates.

The cuts keep coming at General Motors. The automaker will eliminate yet another 117,000 light trucks from its production plans for the rest of the year. That's on top of earlier reductions that means GM will shave a total of 287,000 SUVs and pickups from its U.S. total for 2008.

The latest news brings to 1,760 the number of layoffs that will result from GM's cutbacks. The automaker is eliminating shifts at some plants and trimming back elsewhere, it has revealed, as part of a turnaround plan that requires it to trim billions of dollars in costs - and bring production capacity in line with what the sluggish American market is actually asking for.

GM is by no means alone. Ford and Chrysler are also making major cuts in light truck production - reflecting the impact of the gas price crunch. Since the beginning of the year, full-size pickups, in particular, have lost about a third of their market share - a problem complicated by the slump in U.S. housing.

Even import makers Nissan and Toyota are feeling the pinch. The latter Japanese marque has scheduled significant downtime at its Tundra plant in San Antonio, and will pull additional production of that big pickup out of a second factory in Indiana. Nissan is sharply scaling back light truck production, meanwhile, at its own assembly line, in Canton, Mississippi.

While Ford CEO Alan Mulally said he expects some rebound as the economy recovers, he cautioned it is unlikely the big pickup segment will ever reach its former peak.

To some, it might seem almost anticlimactic. Maybe it should be to all of us. But surprise or not, General Motors, after suffering a 5 percent dip in its global volume, saw its sales for the first half of 2008 fall behind those of its archrival, Toyota Motor Co.

The two have been locked in a heated race for the last two years - GM beat out Toyota in 2007 by just 3,100 sales - but this year's sharp downturn in the U.S. market, particularly in the light truck segment, finally tipped the scales in favor of the Japanese giant.

From January through June, Toyota moved 4.8 million cars, trucks, and crossovers worldwide, compared with 4.54 million for the troubled U.S. maker - which only last week announced the latest in a series of sharp cutbacks that includes still more reductions in pickup and SUV production.

It wasn't all bad for GM. The automaker posted a strong 10 percent growth in overseas sales. Two of its traditionally domestic brands, Chevrolet and Cadillac, both did well abroad, posting double-digit gains.

But there's that troubled U.S. market, where overall industry sales plunged, last month, to their lowest levels in more than a decade, coming in at an anemic, annualized rate of 13.6 million, compared with the 17-million-plus levels of the early part of this decade.

And there are few signs things are going to get better anytime soon, lamented GM's chief sales analyst, Mike DiGiovanni. "Early indications" for July, he warned, suggest "it's going to be another challenging month."

GM isn't the only one suffering, however. Even Toyota saw a 7 percent decline in U.S. sales during the first half of this year, but it more than made up for that elsewhere, especially in emerging markets like China.

Look for a "Made in America" badge to start showing up on Toyota's top-selling hybrid-electric vehicle, the Prius. The Japanese maker will begin producing a version of the high-mileage sedan at a new plant in Blue Springs, Mississippi, starting in 2010, the company has confirmed.

Like its Big Three U.S. competitors, Toyota is trying to adapt, as quickly as possible, to the dramatic shift in the American market driven by record-high oil prices. While the Asian maker is racing to boost production of hybrids and high-mileage small cars, it plans to suspend, for three months, production of the slow-selling, full-sized Tundra pickup, which is built in San Antonio, Texas, as well as the Sequoia SUV, which is assembled in Princeton, Indiana. Both plants will halt production on August 8. Additionally, Toyota will stop production of the Tundra in Princeton next spring, and consolidate assembly of the truck in San Antonio.

Sales of full-size pickups, long one of America's largest product segments, has plunged from about 11 percent of the market at the beginning of the year to just 8 percent in recent weeks.

Toyota sales fell 21 percent in June, an even sharper downturn than the U.S. industry's overall 18 percent decline. The company's slide reflects both the slump in demand for light trucks - and a shortage of hybrids and other high-mileage products. By adding Prius capacity in the States, Toyota hopes to better meet booming demand.

"The truck market continues to worsen, so unfortunately we must temporarily suspend production," said Jim Wiseman, vice president for Toyota Motor engineering and Manufacturing North America. "But this good news about production mix demonstrates our long-term commitment to our North American operations and to our team members, suppliers and communities where our plants are located."

Toyota already produces a hybrid version of its Camry sedan in the United States.

Toyota's Prius hybrid is already a hit with environmentally minded consumers, a fact that has driven the gasoline-electric sedan to the top of the green machine sales charts. But now, the Japanese maker hopes to expand the appeal of Prius by making it even greener.

The Japanese business publication Nikkei reports that some versions of the hybrid will be equipped with solar panels capable of generating as much as 5 kilowatts of electricity, starting next year. That would be enough, according to the paper, to power the hybrid's air conditioning system. That's a significant step, as A/C is a major power drain, particularly if the Prius is operating in battery power, rather than using its internal combustion engine.

The Prius is just the most visible of Toyota's expanding lineup of hybrids, with the automaker promising to offer gas-electric powertrains on virtually all of its product lines by late next decade. It is also developing a so-called plug-in hybrid version of the Prius, which would be able to charge a larger pack of lithium-ion batteries by plugging into the household power grid.

While the sun-powered A/C system - which reportedly will debut next May - is the largest automotive application of solar power, it's not the only one. Several makers, including Mazda, have used solar cells in the past to run vent fans designed to keep a vehicle relatively cool while parked.