NAGOYA, Japan — Toyota plans to sell 9.85 million vehicles worldwide in 2008, the company said Tuesday, setting an ambitious target despite worries about a slowing U.S. car market, as it tries to become the world's top automaker.

NAGOYA, Japan — Toyota plans to sell 9.85 million vehicles worldwide in 2008, the company said Tuesday, setting an ambitious target despite worries about a slowing U.S. car market, as it tries to become the world's top automaker.

Toyota also said it plans to produce 9.95 million vehicles worldwide next year, up 5 percent from this year — the same as the projected annual percentage jump for Toyota's global sales.

Its recent growth has put Toyota Motor Corp. on track to beat U.S.-based General Motors to become the world's largest automaker by sales. GM has said it estimates this year's sales to total 9.3 million vehicles, against Toyota's estimate of 9.36 million sales.

Toyota's growth has been based in large part on the popularity of models such as the Camry sedan, Corolla subcompact and the Prius gas-electric hybrid. Soaring gas prices have dramatically boosted the appeal of smaller fuel-efficient models that are Toyota's main strength.

General Motors has been fiercely fighting back, boosting its overseas business and could still keep the top industry spot, which it has held for 76 years.

Toyota executives acknowledged Tuesday worries about the U.S. market, which has been hit by the subprime mortgage crisis and soaring oil prices. But they nonetheless projected increasing U.S. sales by 1 percent to 2.64 million vehicles.

They were also bullish about prospects for emerging markets such as China, Russia and South America, while being conservative about expectations for Europe, at a 2 percent increase to 1.27 million vehicles, and seeing sales in Japan remain flat at 1.6 million next year.

But Koji Endo, auto analyst with Credit Suisse in Tokyo, said next year will likely prove a challenge even for Toyota, as U.S. economic woes weigh on sales and profits.

Toyota also said it was preparing to start mass producing lithium-ion batteries for low-emission vehicles.

Lithium-ion batteries, already widely used in laptops and other gadgets, are smaller yet more powerful than the nickel-metal hydride batteries used in gas-electric hybrids like the Prius now.

Lithium-ion batteries will not be used in the Prius, on sale for a decade and the most popular hybrid on the market, according to Toyota.

The lithium-ion battery will be used in a plug-in hybrid, which would recharge from a regular home socket, and travel longer as an electric vehicle than the Prius.

Toyota has started tests on its plug-in hybrid, but has not shown a model using the new battery.

Executive Vice President Masatami Takimoto, who oversees technology, said Toyota had developed the lithium-ion battery to a level that it is almost ready for mass production, although that won't start until sometime after next year.

Toyota President Katsuaki Watanabe said the hybrid will be a pillar of Toyota's growth in the years ahead, and he reiterated the plan to offer hybrid versions of all its models sometime after 2020.