Toyoda announced plans for the new car -- a joint venture with Subaru -- while outlining his strategy for reversing the company's sales and income slide and charting a long-term course designed to appeal to new generations of motorists.
He also said the company has not decided the future of a California manufacturing plant that it operated jointly with General Motors, which announced in June it was abandoning the 50-50 venture as it emerges from bankruptcy protection.
"We are back where we were 100 years ago, at a point where we must reinvent the automobile," Toyoda said during an industry conference at a Lake Michigan resort. It was his first speech in North America since becoming president in June of the company founded by his grandfather.
Earlier this week, Toyota reported a smaller-than-expected loss of 77.82 billion yen ($819 million) for the quarter ending June 30 and said it expected less red ink for the full year than initially projected. Still, it suffered a 38.3 percent global sales drop during the quarter as the recession took its toll on the industry.
Despite its reputation for high quality and fuel efficiency, company officials acknowledge a need for more stylish vehicles to attract U.S. buyers -- especially younger ones.
"You're going to have to have passion in your products" while retaining quality and value, Jim Lentz, president of Toyota Motor Sales, USA, Inc., told reporters after Toyoda spoke.
Toyoda, 53, described himself as a "car nut" and race driver who loves the feel of a car on the open road.
"I want to see Toyota build cars that are fun and exciting to drive," he said.
Without offering details, he said the planned sports car would fit the bill without being too expensive.
"I am very excited about it and I plan to fast-track it," Toyoda said, adding that it would be launched within a few years.
He also emphasized fuel efficiency, saying rising oil prices and dwindling supplies have left the industry at a "once-in-a-century crossroads" where excelling at making gas-sippers and alternative-power vehicles will be a matter of survival.
Toyota has sold 2 million of its Prius hybrids and will launch a plug-in hybrid for fleet customers this year. A pure electric car is planned for 2012 and the company is making progress on hydrogen fuel cell vehicles, Toyoda said.
Lentz acknowledged the planned sports car might seem at odds with the goal of saving energy, but said the company needs products that will appeal to a cross-section of U.S. consumers. He declined comment on where the vehicle would be built.
Toyoda made only a passing reference to the New United Motor Manufacturing Inc. plant in Fremont, Calif., which makes the Pontiac Vibe station wagon for GM and the Corolla compact car and Tacoma pickup truck for Toyota.
Toyoda once was vice president of NUMMI, which was established in 1984 and employs 4,600 workers. Company officials have said they might liquidate Toyota's stake.
GM's withdrawal "has created some extremely difficult issues for us to resolve," Toyoda said. "We are still studying the situation and hope to make a decision soon."
Responding to an audience question, Toyoda said it was unlikely the company would form partnerships such as Nissan's alliance with Renault.
"Toyota is not the sort of company that is very good at alliances," instead preferring to develop relationships with suppliers and dealers, he said.