In Chinese port city, Japan’s Toyota lays foundation to ramp up sales
BEIJING: Toyota Motor Corp is likely to make 120,000 more cars a year in the Chinese port city of Tianjin as part of a medium-term strategy that’s gathering pace as China- Japan ties improve, said four company insiders with knowledge of the matter.
The Japanese auto maker’s plan to boost annual production capacity by about a quarter in the port city will lay the foundation to increase sales in China to two million vehicles per year, a jump of over 50 per cent, the four sources said.
The Tianjin expansion signals Toyota’s willingness to start adding signi f icant manufacturing capacity in China with the possibility of one or two new assembly plants in the world’s biggest auto market, the sources said. Car imports could also increase, they said.
The move comes at a time when China’s trade outlook with the United States appears fraught and uncertain.
Toyota plans to significantly expand its sales networks and focus more on electric car technologies as part of the strategy, the sources said, declining to be identified as they are not authorised to speak to the media.
Toyota sold 1.29 million vehicles in China last year and while sales are projected at 1.4 million this year, “capacity constraints” have restricted stronger growth, the sources said.
Toyota’s manufacturing hub in Tianjin currently has the capacity to produce 510,000 vehicles a year, while Toyota as a whole, between two joint ventures, has overall capacity to churn out 1.16 million vehicles a year.
Manufacturing capacity numbers provided by automakers are called straight-time capacity without overtime.
With overtime, a given assembly plant can produce 20 to 30 per cent more than its capacity.
According to two Tianjin government websites last week, Toyota has been given regulatory approval by the municipal government’s Development and Reform Commi s sion to pursue its expansion. — Reuters