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Toyota announces ambitious target of 2,5 million vehicles annually by 2030 to compete with BYD in Chinese market
According to information from Reuters, Toyota, the world's largest automaker, has an ambitious goal for the Chinese market in the coming years: to manufacture up to 2,5 million vehicles per year in China by 2030, according to international sources. One of the goals would be to recover the space lost to BYD.
This plan marks an important change for the assembler in the world's largest automotive market, with the intention of recovering space lost to local companies, such as BYD. The expected volume represents a 63% increase over the record 1,84 million vehicles in 2022.
Approaching the Chinese market dominated by BYD
Unlike other Japanese automakers, which have chosen to reduce their presence in China, Toyota bets on a more collaborative approach with the local market.
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The company plans to increase the independence of its local executives by transferring to them more responsibility for developing vehicles. This change, therefore, seeks to ensure that, consequently, the preferences of Chinese consumers are met in a more agile and efficient manner.
Partnership with joint ventures locations
The strategy includes closer ties with Toyota's two joint ventures in China, FAW Toyota Motor and GAC Toyota Motor. The automaker aims to consolidate the production of each vehicle in one of the joint ventures, optimizing costs and increasing efficiency.
This means that the same car model will be available for deliveries from both partnerships, facilitating transportation and simplifying production complexity.
Toyota's Challenges in the Chinese Market
Despite its ambitious plan, Toyota faces significant challenges in China. Competition from local automakers, especially in the production of electric and affordable vehicles, has been intense.
Brands such as Hongqi and Aion EV from FAW Group and GAC Group, respectively, have outsold Toyota models. This performance reflects the appeal of local brands, which are shown to be more agile in adapting to market demands.
Toyota's investment in research and development
To stay competitive, Toyota plans to deepen cooperation between its R&D center in Jiangsu and its Chinese joint ventures. The goal is to accelerate the creation of electrified and connected vehicles, in line with the Chinese public's preference for advanced technologies.
The integration of local know-how in the production of new models is one of the bets to consolidate the brand's presence in the country.
Impacts on Japanese suppliers
Toyota's delivery also directly affects its Japanese suppliers operating in China. Companies in the auto parts sector are struggling to maintain their competitiveness in the face of rapid innovations by Chinese brands.
Toyota hopes the production increase will help reassure these suppliers that it will remain in business, ensuring the continuity of supply chains.
Pressure on operating profit
Toyota thus announced a drop in operating profit in China in the first half of the fiscal year, the result of high marketing costs due, above all, to intense competition with Chinese brands.
The search for cost-cutting and production efficiency strategies is at the heart of the automaker's efforts to increase profitability.
Withdrawal of other Japanese automakers
The Toyota It also contrasts with the stance of other Japanese automakers in China. Mitsubishi Motors recently decided to withdraw from the country, while Honda and Nissan have opted to reduce their local purchases.
Toyota, on the other hand, intends to consolidate its share in the Chinese market, thus investing in synergy with local partners and expanding its production line.
Toyota's commitment to China represents an attempt to recover in the world's largest auto market.
With increased production and closer ties with local joint ventures, the automaker seeks not only to win over new consumers, but also to solidify its position in the face of intense competition.
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