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March 2, 2010

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Home » Business » Auto

Toyoda stresses China's key role

TOYOTA President Akio Toyoda apologized yesterday to customers in China for the company's quality problems and emphasized the significance of the nation's fast-growing market to his company.

Toyoda said he flew straight to Beijing from the United States to show his sincerity to Chinese customers.

He faced a grilling last week in Washington DC by American lawmakers about Toyota's recalls over sticking gas pedals, faulty floor mats and brake woes.

"The Chinese market is very important, so I flew here in person in the hope my personal expression of an apology and explanation will give customers some relief," Toyoda said at a news conference in the capital. He apologized four times during the one-hour event.

China overtook the US last year as the biggest auto market with a 48 percent jump in sales as vehicle makers look here to offset weak demand elsewhere.

Toyota recalled 75,522 RAV4 SUVs in China in late January - a small percentage of the 8.5 million vehicles pulled worldwide since October.

Toyoda, also the company CEO, said he will lead a new global quality committee that will have a chief quality officer from each region, including China.

He met China's Commerce Minister Chen Deming earlier yesterday, said ministry press official Chen Rongkai.

Asked why so few vehicles were recalled in China and whether that meant Toyota was discriminating against Chinese customers, Toyoda said the other vehicles sold in this country did not use components that led to recalls.

"The worldwide recall has brought many concerns and worries to Chinese consumers and we feel sincerely sorry," said Toyoda, 53.

The US recalls have shaken confidence in Toyota's reputation for quality.

However in China, Toyota's sales with two local joint-venture partners were up in February from a year earlier, the China Passenger Car Association estimated.

Toyoda said Toyota's 2010 sales target of 800,000 units in China was unchanged.

Last year, Toyota sold 709,000 vehicles in the country, up 21 percent from 2008, while the overall Chinese auto market jumped 45 percent to 13.6 million units.

"It's a swifter and more effective response in China compared to the US," said Xu Caihua, an auto analyst from Guodu Securities Co. "Losing the Chinese market could make its global recovery a much tougher road."

Another analyst said the global recall had cast a shadow over Toyota's bid to catch up with major rivals in China. "Toyota is not a mainstream car maker in China in terms of sales and market share," said Zhong Shi.

"The 800,000 sales target is not overly optimistic. It's already quite conservative considering the high growth in theChinese auto market," Zhong said.


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