The reputation of the London Motor Show received a further blow today with Toyota announcing that neither it nor its premium brand, Lexus, will be appearing in 2001.

Mike Moran, Toyota commercial director, said: "2000 was a disappointing year for us financially and 2001 will be similarly challenging.

"The combination of our October price reductions (an average of 8%) coupled with other economic factors and the significant impact on our forward revenues have meant that tough decisions have had to be made with respect to our 2001 budget."

He said that the money saved in not attending the show (around £1 million) would be spent on other marketing initiatives. Advertising revenue, Mr Moran said, would not be cut "if we can possibly avoid it".

To the end of November Toyota registrations reached 80,047 units - 7.4% up on the previous year - and a market share of 3.79%.

Mr Moran offered an olive branch to the London show organisers. "This is not a long term decision," he said. "In principle we have no issue with the London Motor Show and fully expect to return in 2003."

Toyota is also expected to announce an increase in production at its Burnaston site, along with new jobs and it is investing, along with its dealers, in new/updated facilities across the network.

Peugeot, VW, Audi, Skoda, Seat, BMW and Mercedes-Benz have already said they will not be attending the London motor show. Ford has said it has yet to make up its mind.