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Toyota announces the construction of its first electric car factory in China, entering directly into BYD's territory and expanding its presence in the market.
Toyota, the global leader in vehicle manufacturing, is preparing to take on Chinese giant BYD on its own turf, according to the renowned Japanese business newspaper Nikkei, the Japanese automaker will build its first factory exclusively dedicated to electric cars in China by 2027.
This initiative seeks to strengthen its position in the world's largest automotive market and expand its presence in the electric vehicle segment, where it is currently facing difficulties.
Toyota targets market dominated by BYD
Despite its global sales dominance, Toyota is performing poorly in the Chinese market, especially in the electric car segment.
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BYD, the main competitor, leads the sector with around 36% market share and monthly sales exceeding half a million units.
The construction of this new factory is part of Toyota's strategy to reduce this distance and increase its competitiveness in the local market.
The factory will be located on the outskirts of Shanghai, a region that is already home to major automakers such as Nio and the SAIC Group, owner of the MG brand.
This will be Toyota's first 100%-owned factory in China, a significant milestone as the company has until now produced vehicles in the country in partnership with local manufacturers.
Focus on the Lexus brand
Interestingly, the new factory will not produce Toyota brand vehicles, but will be dedicated to manufacturing electric cars for Lexus, the group's luxury division.
According to sources cited by Nikkei, the strategy aims to align with Toyota's global plan to manufacture 3,5 million electric cars per year by 2030, meeting the growing demand for premium electric vehicles in China.
This decision reflects the group's intention to strengthen Lexus' presence in the Chinese market, where consumers are increasingly interested in luxury vehicles with sustainable technologies.
The measure also demonstrates the strategic importance of the premium segment for the automaker's long-term plans.
Partnership with BYD continues
As Toyota prepares to operate independently with its new plant, it continues to maintain its collaboration with BYD.
Recently, the two companies launched models such as the Toyota bZ3c, an electric SUV, and the bZ7, an electric sedan, both aimed exclusively at the Chinese market.
These vehicles are produced in joint factories, highlighting the complex relationship between competition and cooperation that characterizes the automotive sector in China.
Challenges and opportunities
Toyota's decision reflects the urgency to adapt to the rapidly changing global auto market.
With demand for electric vehicles increasing and pressure to transition to cleaner technologies, the automaker recognizes the importance of competing directly with companies like BYD in strategic markets.
Still, significant challenges remain. In addition to strong local competition, Toyota will need to invest heavily in infrastructure and technology development to meet the expectations of Chinese consumers, who are among the most demanding in the world.
The construction of the new factory marks a decisive step, but it also requires rigorous planning to ensure success in such a competitive market.
By 2027, Toyota will have to prove that it can not only compete, but also gain ground in a field where its main rival already reigns supreme.
With the arrival of the new factory, Toyota promises to further move the global automotive market, reinforcing its commitment to innovation and sustainability in the sector.
