Toyota may expand China output as it targets sales of 2 million units
Toyota Motor Corp., already planning to build one new assembly plant in China in 2017, is in talks to further ramp up production in the world's largest auto market.
The Japanese carmaker is weighing expansion in northern China, where it has a joint venture with FAW Group, to reach 2 million sales per year, Hiroji Onishi, CEO of Toyota's China business, said Tuesday.
Last week, Toyota said it would spend $439 million (2.7 billion yuan) to add
production in 2017 with Guangzhou Automobile Group Co.
"No concrete decision has been made, but just as in the case of our operations in the southern part of China, we continue to have discussions with our partners aiming at our
growth over the medium term," Onishi told reporters at the Shanghai auto show.
The Guangzhou plant will resume an era of factory expansion by Toyota, which hasn't built a new assembly plant worldwide since 2013. President Akio Toyoda signed off on the plan announced last week after pressing the company to boost production at existing factories.
The efficiency drive has positioned Toyota to report its second straight year of record profits.
Earnings are improving even though Toyota has struggled in China. The carmaker sold 1 million vehicles in the country for the first time in 2014, two years behind schedule. Volkswagen AG and General Motors each outsell Toyota locally by 3-to-1.
Capacity plans
Once production of a to-be-named model begins from 2017 in Guangzhou, Toyota will have local capacity to build 1.1 million vehicles. Volkswagen, which may pass Toyota to become the world's top-selling automaker this year, plans to raise annual capacity in China to 5 million vehicles by 2019.
Market conditions in China have turned less favorable since the second half of last year under the government's "new normal" policy orientation, Onishi said Tuesday.
"We don't intend whatsoever to slow down or stop our approach aiming at 2 million sales units, but at the same time we will very carefully and closely observe the new normal conditions," he told reporters.
Last week, Toyota said it would spend $439 million (2.7 billion yuan) to add
production in 2017 with Guangzhou Automobile Group Co.
"No concrete decision has been made, but just as in the case of our operations in the southern part of China, we continue to have discussions with our partners aiming at our
growth over the medium term," Onishi told reporters at the Shanghai auto show.
The Guangzhou plant will resume an era of factory expansion by Toyota, which hasn't built a new assembly plant worldwide since 2013. President Akio Toyoda signed off on the plan announced last week after pressing the company to boost production at existing factories.
The efficiency drive has positioned Toyota to report its second straight year of record profits.
Earnings are improving even though Toyota has struggled in China. The carmaker sold 1 million vehicles in the country for the first time in 2014, two years behind schedule. Volkswagen AG and General Motors each outsell Toyota locally by 3-to-1.
Capacity plans
Once production of a to-be-named model begins from 2017 in Guangzhou, Toyota will have local capacity to build 1.1 million vehicles. Volkswagen, which may pass Toyota to become the world's top-selling automaker this year, plans to raise annual capacity in China to 5 million vehicles by 2019.
Market conditions in China have turned less favorable since the second half of last year under the government's "new normal" policy orientation, Onishi said Tuesday.
"We don't intend whatsoever to slow down or stop our approach aiming at 2 million sales units, but at the same time we will very carefully and closely observe the new normal conditions," he told reporters.
