Jan. 29 (Platts) -- Japanese aluminum alloy suppliers are still nervous about their business outlook for the year, even though Toyota Motor has revised up its 2012 sales forecast as automakers reorganize supply chains to cut costs, industry sources said Thursday.

Toyota Motor on Wednesday said its domestic passenger vehicle sales for 2012 were revised up to 1.63 million vehicles, from the previous forecast of 1.53 million vehicles. In 2011, 1.2 million vehicles were sold in the domestic market.

The automaker's sales forecast was revised up due to an expected increase in demand from the continuing government subsidy for fuel-efficient vehicles, a Toyota spokeswoman said.

Toyota Motor does not publicly disclose production plans, however, last week the automaker told major suppliers it plans to produce a total 15,000-15,500 vehicles/day at its Japanese plants in April, the sources said. The monthly production volume will remain stable from January-March, which is also planned at above 15,000 vehicles/day, sources added.

Japanese diecasters and aluminum alloy suppliers, who were expecting a decline in April production due to a drop in consumer spending, said they were still nervous about aluminum demand as Toyota as well as other Japanese automakers were reorganizing their supply chains for components.

"There is nothing to speak about the Toyota sales forecast ... we still face severe market conditions as the improved outlook does not directly translate into [domestically produced] aluminum demand," an official at a Japanese secondary aluminum smelter said. "Alloy imports [from China] may take away our business. And more components are produced overseas," he added.

A Tokyo trader who supplies light metal to components makers said: "It is difficult to believe that Toyota is set to produce 15,500 vehicles/day in February, as orders from diecasters are not up to this level."

Another metal trader, however, said order volumes from Toyota, Nissan and other automakers were in line with their output figures.

An auto component supplier said the supply chain is changing on the back of requirements to make vehicles lighter and reduce costs, as Japanese automakers' export earnings would be impacted by a weaker US dollar.

For example, Toyota's new hybrid passenger vehicle Aqua, released on December 26, uses less secondary aluminum alloy, the source said.

Aqua, a small-sized hybrid passenger vehicle with a 1.5 liter engine, has sold out and Japanese buyers need to wait six months, said several Toyota sources. Toyota will release Aqua's order figure in February.

A passenger car typically requires over 5 kg of secondary aluminum alloy to be used for the engine, oil pan and transmission component among others, sources said. The engine is the largest aluminum component, weighing around 2 kg, sources added.

Aqua's engine is made in Japan, and so far, aluminum components have not been replaced by plastic. "Aluminum volume reduction was achieved by making it thin," a source familiar with the matter said.