HONDA, NISSAN OUTSELLING TOYOTA

Japan’s biggest carmaker has fallen behind rivals in China due to ‘lack of smallish crossover SUVs’

TOYOTA Motor Corp, Japan’s biggest carmaker by volume, has fallen to the No. 3 spot among Japanese carmakers in China, due to lack of presence in a key segment — a situation experts say will likely prevail well past the middle of next year.

Through last month, Honda Motor and Nissan Motor Co both outsold Toyota in China, the world’s biggest car market.

Toyota’s sales in the first 10 months of this year totalled 1.07 million vehicles, compared with 1.16 million vehicles Honda sold during the same period. Nissan’s volume through last month amounted to 1.17 million vehicles.

China-market experts believe the main cause for Toyota’s relative weakness lies in the lack of smallish crossover sport-utility vehicles (SUVs) that others, most notably Honda in recent months, have leveraged to accelerate growth.

Honda’s sales have started to grow relatively rapidly and more consistently since 2015, after two key subcompact crossover SUVs hit the market in late 2014.

Though volume growth from these two models — the XR-V and the Vezel — have decelerated more recently, the gap was filled by the redesigned Civic car. The Civic hit the Chinese market in April last year.

However, head of Shanghaibased consultancy Automotive Foresight, Yale Zhang, isn’t all that pessimistic about Toyota’s sales outlook.

“Toyota’s compact sedans, especially hybrid versions of the Corolla and the Levin, are doing well. That would give Toyota moderate growth this year and next year, but the issue is the lack of presence” in one of the hottest segments in the Chinese car market, he said.

If Toyota had subcompact crossover SUVs like Honda’s Vezel and XR-V, “the company can generate an extra volume of 150,000 units a year at least, which would be a pure incremental volume for Toyota since they don’t offer any product in this segment today”, said Zhang.