You know it’s a real crisis when even Toyota Motor Corp. is seriously hurting – and it is.

Once seemingly impervious to the sales and profit woes that plague lesser auto makers, Toyota’s vehicle sales and profits are plummeting globally, as well as in the U.S. It has slashed its profit projections almost 70% for the current fiscal year, and its credit rating has been downgraded.

Toyota’s U.S. sales declined 25.9% in October, not much better than the industry-wide plunge of 32%, despite an aggressive 0% financing program, and it is not expected to get better soon. Ward’s is forecasting Toyota’s daily sales for November at about 5,500 units – down 30% compared with year-ago.

Toyota is suffering, in part, because it has a heavier mix of trucks in its product portfolio than competitors such as American Honda Motor Inc. That means its cash flow is being crimped by the same market forces that are punishing Detroit. The few buyers that are out there are shifting away from high-profit large and luxury vehicles to smaller, lower-margin cars.

Even though profits and sales are slumping, Toyota’s long-term outlook remains stronger than most of its rivals. It still has lots of cash and little debt. Executives say the auto maker is not interested in taking advantage of government loans to retool U.S. plants, nor is it interested in buying up any assets from the beleaguered Detroit Three.

Bob Carter, Toyota Div. general manager, says Toyota is “not looking for any federal or government intervention for ourselves. We’re fortunate to be in a well-capitalized, fiscally strong position. There’s nothing arrogant about that, it’s just a fact,” he tells Ward’s.

Despite cost-cutting, Toyota is looking ahead with new ideas to stimulate demand. That includes accelerating its hybrid-electric-vehicle strategy and seeing if some Americans might be willing to trade burliness for fuel economy in the pickup market.

In an interview with Ward’s editors, Jim Lentz, president-Toyota Motor Sales U.S.A. Inc., reveals the auto maker is re-evaluating many of its key products and the segments it competes in, but looks so far to be backing away from none, whether it is plug-in HEVs, fullsize pickup trucks or anything in between.

And he expresses little concern that Toyota’s expansion in the light-truck sector will result in any long-term harm to the auto maker’s ultra-green image.

Toyota has taken heat from environmentalists over the past several years for products such as the new Tundra pickup and Sequoia fullsize SUV, Lentz admits, but says the auto maker’s sheer volume of coming HEVs vs. gas guzzlers should allay their concerns.

“I think selling 275,000 hybrids speaks for itself,” he says. “And I think as we go forward as a company in this next decade, we will be selling 1 million hybrids on an annual basis. In the U.S., our piece will be 600,000 (units) plus. I think that will take care of it.”

Despite its HEV push, which includes a soon-to-be announced dedicated Lexus model very different from the Prius, Toyota has been giving mixed signals about its enthusiasm for using lithium-ion batteries to power its next generation of HEVs and competing directly with General Motors Corp. and Nissan Motor Co. Ltd. to offer plug-in HEVs and pure-electric vehicles.

Li-ion batteries have superior power density to the nickel-metal-hydride power packs currently being used in most HEVs and will power GM’s Volt extended-range electric vehicle and upcoming EVs from Nissan.

But Toyota’s next-generation Prius, to be unveiled at January’s North American International Auto Show in Detroit, is expected to be powered by more conventional NiMH batteries. Toyota engineers also have stated publicly they think NiMH batteries still have a long future ahead of them.

So where is Toyota headed with plug-ins and Li-ion technology? Lentz still is circumspect, citing concerns about cost, reliability and consumer acceptance.

“I’m not trying to be coy,” he says. “We have a handful of plug-ins running around on nickel-hydride batteries; (test) vehicles starting at the end of 2009 will be lithium-ions. What we really need to do as we go through this test is not only understand the durability of the battery, but understand from the customer perspective the mix between range, between cost and how much space they are willing to give up to increase range on battery power. I don’t think we know now what that is.”

Whatever Toyota uses to power future HEVs, Lentz says development of an infrastructure for manufacturing batteries in the U.S. probably is inevitable.

“I can’t tell you when it will be, but we already build the hybrid Camry in the U.S., and we will be building the Prius. I think we will have to build batteries here eventually, just because of the logistics cost of bringing them in from Japan.”

Toyota also is taking a new look at the pickup market. After a strong startup two years ago, Tundra sales nosedived along with the rest of the market earlier this year, necessitating a lengthy shutdown of the auto maker’s new plant in San Antonio, TX.

Lentz says about 70% of the fullsize-pickup market is comprised of buyers who require the vehicle for work or serious towing duties and eventually will come back to the marketplace. However, the remainder has given up traditional pickups for good but may be open to a new type of vehicle that compromises some traditional pickup features for better fuel economy.

“The trick is to figure out,” he says. “ I can’t quite give you a truck that tows 10,000 lbs. (4,536 kg), but I might be able to give you 6,000 lbs. or 7,000 lbs. (2,722 or 3,175 kg). And I can’t quite give you 1,800 lbs. (816 kg) of cargo capacity, but in exchange for that, I can get you, 24 mpg (10 L/100 km) instead of 18 mpg (13 L/100 km).”

That’s what the A-BAT hybrid pickup truck concept introduced this year in Detroit was all about, Lentz says.

The A-BAT hasn’t been given the green light for production yet, but it has started a discussion about the viability of a unibody-based pickup. “That’s what that truck is all about: ‘To get more mileage, would you do this? Would you be willing to do that?’” Lentz says.

One thing that looks more concrete is Toyota getting cold feet about offering a light-duty diesel in the Tundra and Sequoia in 2010. Ford Motor Co. already has put its 4.4L diesel on hold. Lentz won’t comment directly, but he hardly sounds enthusiastic.

“If you end up with a diesel premium for engines or (particulate) traps, that’s $5,000 or $6,000, and then someone’s paying $1 more for the fuel. I’m just not sure how viable that is.”

– with Christie Schweinsberg