This Is Toyota's Way Of Dealing With Competition With Local Automotive Manufacturers In China

Toyota Motor plans to extend its production reduction policy in one of its joint ventures in China, in response to growing competition pressures in China's automotive markets.

The production cut plan, which previously lasted during October and November, has now been extended for the next three months. This step was taken to manage supply stress on the dealers' network and ensure the smooth operation of the company amid intense competition.

According to a FAW-Toyota statement reported by Reuters on Tuesday, November 7, production will be significantly reduced from December to February next year. It is planned that car sales to the dealers' network will be reduced by 66,000 units in December, 60,000 units in January, and 38,000 units in February.

Although Toyota has managed to evade the negative impacts experienced by other Japanese brands in China, such as Nissan, Honda, and Mitsubishi, the company remains faced with a huge challenge in maintaining its position in the global market and maintaining its reputation as the world's largest automotive company.

China's automotive market itself has been hit by local manufacturers such as BYD, which have managed to expand its global reach by marketing environmentally friendly vehicles, including plug-in hybrid (PHEV) and electric vehicles (EVs) at competitive prices.

Earlier in July, Toyota had terminated the contract of 1,000 workers at its joint venture with Guangzhou Automobile Group (GAC) due to production problems.

With sales of more than 1.2 million cars to dealers in China in the January to September period, Toyota is currently ranked third after BYD and Volkswagen, although it has decreased by 9 percent compared to the previous year.