Toyota Partially Halts Production in China

Jiji Press

15:05 JST, December 2, 2023

BEIJING (Jiji Press) — Major production adjustments are underway at Toyota Motor Corp.’s assembly plant in the Chinese city of Tianjin, informed sources told Jiji Press on Friday.

The move comes in response to sluggish sales of gasoline-powered vehicles, which are Toyota’s mainstay products, amid a rapid shift to electric vehicles in the Chinese market.

The plant is operated by Tianjin FAW Toyota Engine Co., which is jointly owned by the Japanese automaker, China’s state-owned China FAW Group Corp. and others.

At the plant, production of the Vios compact sedan ended by summer this year, and that of the popular Corolla sedan has been reduced, according to the sources.

In China, electric vehicles are rapidly spreading on the back of government support, including subsidies. As a result, Chinese automakers with competitive edges in electric vehicles are expanding their market share, while Japanese rivals are struggling, not helped by their advantages in gasoline-powered vehicles.

Overall new vehicle sales in China grew 9.1% from a year earlier to 23,967,000 units in January-October, mainly reflecting strong electric vehicle sales. But Toyota’s sales fell 3.6% to 1,557,600 units. The company cut about 1,000 temporary jobs this year at GAC Toyota Motor Co., another joint venture.

Other Japanese automakers are also struggling in China, with sales dropping 16.7% and 25.1% at Honda Motor Co. and Nissan Motor Co., respectively.

In October, Mitsubishi Motors Corp. announced its withdrawal from auto production in China.

“Toyota is holding up better [than other foreign automakers in China],” said an official at a Japan-affiliated automaker in Beijing. “Things are tough for non-Chinese automakers, including those from Europe and the United States.”