Toyota to slash output in China

KeyWord:TOYOTA;auto parts
TOYOTA Motor Corp said yesterday it would cut production at its Chinese plants due to shortage of auto parts following the devastating earthquake in Japan last month.

By June 3, production capacity at all of its car manufacturing plants in China will be lower by 50 percent, and under extreme circumstances, as low as 30 percent, the auto maker said in an statement.

Toyota said the decision was made with its Chinese partners as well as suppliers after the earthquake and tsunami in Japan caused disruption in auto parts supply. Production at its spare parts factories in China will also be affected and its summer break will be moved to May from July.

Toyota, in partnership with FAW Group and Guangzhou Automobile Group, boosted sales by 19 percent to 846,000 units in China last year.

The March 11 earthquake in Japan, which triggered plant shutdowns and a disruption in car components worldwide, may cut vehicle output in China by 300,000 units in the second quarter, according to John Zeng, director of Asian Forecasting at JD Power consultancy in Shanghai.

"If the parts supply does not improve after June, it would be difficult for Toyota to achieve its 2011 sales target," he said.

Slow response to market demand and localization has led to slow development of Toyota in China, where General Motors and Volkswagen have gained hefty sales.

General Motors reported China sales rose 28 percent to 2.35 million units last year while Volkswagen sold 1.97 million units, up 37 percent.

Toyota earlier announced it aims to sell 15 million vehicles in China by 2015, which will account for 15 percent of its global sales. Last year, the proportion was 11 percent.

Shinji Kitada, president of Toyota Motor (China) Investment Co, said the car maker will speed up efforts on localization, evidenced by the revamp in the management team to hasten the decision-making process.

Strengthening local engineering capability will be another focus, leveraging on the company's US$689 million wholly-owned research and development center in Changshu, Jiangsu Province

"The center will be the biggest in Toyota's global portfolio and focus on the development of new energy vehicles and models that meet local demand," said Kitada.

Company sources told Shanghai Daily yesterday that full-year output for the Chinese market has not been changed yet, pending improved conditions after June.

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2011-04-22 10:57:06