- Toyota plans to nearly double production from 1.75 million last year to 3 million by decade’s end.
- The company also aims to consolidate its two Chinese joint ventures to improve efficiency.
- The plan will require significant investments that other Japanese automakers aren’t willing to make.
Toyota is doubling down on its ambitions for the Chinese market, aiming to produce as many as 3 million vehicles annually in the country as it fights to claw back market share lost to surging domestic brands like BYD. The move seems to reflect Toyota’s acknowledgment of the challenges it faces in the world’s largest car market, where local brands have steadily gained ground by offering competitive, well-suited products that resonate with Chinese buyers.
According to three sources familiar with the matter, who spoke on condition of anonymity to Reuters, Toyota plans to significantly increase production in China by the end of the decade, although no formal target has been set. This would represent a substantial rise from the 1.75 million vehicles Toyota produced locally last year and a 63% increase over the 1.84 million it built in 2022, which was a record for the company.
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The same insiders claim that Toyota has informed some of its suppliers about the planned ramp-up in production. In addition, the company aims to bring its two Chinese joint ventures closer together to improve efficiency and plans to empower local staff to lead much of the development, leveraging their understanding of Chinese consumer preferences.
The company also plans to consolidate vehicle production across its joint ventures into a single operation in the future. While models will be produced at one location, they will continue to be offered across both dealership networks, signaling a more unified approach to its fragmented local strategy.
Toyota has not commented on the specifics of the report but acknowledged the uphill battle it faces in China. “With the intense competition in the Chinese market, we are constantly considering various initiatives,” the company stated.
The struggles of Toyota aren’t unique among legacy carmakers in China. Established brands like Honda and Nissan have already scaled back their production capacity, while Mitsubishi has thrown in the towel altogether, exiting the market entirely. Meanwhile, local automakers like BYD are rapidly gaining ground, delivering compelling products at competitive prices that resonate with Chinese consumers.
Toyota has made some efforts to localize its offerings. One example is the bZ3C, an electric sedan designed specifically for China. It’s equipped with a lithium-iron-phosphate battery pack from BYD’s FinDreams battery division, boasting a range of 500-600 km (310-372 miles).
