Japanese auto giant Toyota which has just announced having achieved the cumulative 300 million vehicles milestone, is struggling to keep up pace in China, the world’s largest & most competitive car market.
Toyota has now announced it would extend its production cuts in China by three months to reduce inventory pressure on dealers. The automaker had previously notified dealers production at its Tianjin joint venture with state-owned FAW Group would be reduced in October and November due to rising competition mainly from domestic automakers such as BYD, Geely as well as Tesla.
Most major auto brands in China have slashed prices over the last year due to overcapacity, with a large number of local manufacturers also said to be struggling under pressure from intensifying competition. Other Japanese brands including Honda and Nissan also have had to cut output in China and have stepped up their battery electric vehicle (BEV) production and export plans under rising competitive pressure, while Mitsubishi announced in September it would exit its local joint venture with Guangzhou Automobile Group (GAC).
Related: Toyota Fires 1,000 Workers in China
Toyota earlier this year also cut production and laid off around 1,000 workers at its other main Chinese joint venture, with Guangzhou Automobile Group (GAC-Toyota), which makes the bZ4X EV. According to local reports, FAW-Toyota told dealers that production cuts would be extended until the end of February 2024 to ensure its dealers could continue to operate well in the current “severe market environment”. In a letter to dealers, the joint venture said:
“Production from December until February of next year will continue to be reduced by a large amount”, adding the measures would reduce output to 66,000 units in December, 60,000 units in January, and 38,000 units in February”.
Toyota is struggling to keep up with competition in the country’s fast-growing electric vehicle segment with its FAW-Toyota joint venture producing just the CHR-based Izoa BEV while also making the RAV4 and Corolla plug-in hybrids as well as a wide range of internal combustion engine (ICE) models.
The cumulative sales of both Toyota joint ventures (FAW-Toyota and GAC-Toyota) in China stood at 1.38 million vehicles during the first 9 months of the year, which is 9% less than the sales from the previous year.
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