Toyota has slashed about 1,000 jobs in China as Japanese automakers are losing their shares in the world’s largest market, where electric vehicles are rapidly gaining popularity. The massive payroll reduction was decided “in light of the recent production situation,” according to a Toyota official.
Workers hired by Toyota’s GAC (Guangzhou Automobile Group) joint venture in China laid off the workers over the weekend and offered them compensation, as reported by Reuters. Compensation will be paid to them in accordance with the law.
The GAC-Toyota factory has an annual output capacity of 1 million vehicles and produces models including Camry, Levin, and the bZ4X EV. The number of jobs shed accounted for 5% of GAC-Toyota’s 19,000 workforce.
Toyota’s move comes after peer Mitsubishi Motors recently announced to make an exit from the Chinese market due to poor sales. Japanese brands suffered the steepest sales slumps among automakers in China in the first half of this year, with their market share shrinking to 14.9% from nearly 20% a year ago, according to the China Association of Automobile Association. Meanwhile, sales of Chinese domestic brands accounted for 53% of the total.
Toyota has been counting on its EV models to revive sales in China, which fell 9% in the first six months of this year. The company joined a price war started by Tesla in January and slashed the starting price for its bZ4X EV by 15% in February. The decision has not yet paid off, though, as sales of Toyota EVs are still on the weak side.
A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com