Toyota’s China growth pace to halve
Print Edition
TOYOTA Motor Corp expects its pace of growth in China to almost halve in 2015 after failing to meet last year’s target and as dealers demand compensation to atone for lackluster sales.
Japan’s top carmaker said yesterday that it sold about 1.03 million vehicles in China in 2014, up 12.5 percent from the previous year but short of its sales target of more than 1.1 million. In 2015, the carmaker aims to sell 1.1 million vehicles in the country, representing a growth of 6.8 percent.
Japanese carmakers in China faced the twin challenges of a slowing economy and flares of political tension between Beijing and Tokyo over the last year. Growth of China’s auto market, the world’s biggest, halved to around 7 percent in 2014.
But unlike rivals Honda Motor Co and Nissan Motor Co, Toyota chose not to trim its China sales target.
Some Toyota dealers complain that they were forced to buy stock from the carmaker due to unrealistic sales goals, resulting in bloated inventories and heavy losses.
Last week, the China Automobile Dealers Association, representing more than 500 Toyota dealers, submitted a letter to Toyota’s joint venture with China FAW Group Co, demanding 2.2 billion yuan (US$354 million) in subsidies and more realistic sales targets.
Song Tao, CADA’s deputy secretary, said FAW-Toyota agreed to negotiate with the dealers through a dealers’ council. Toyota declined comment.
The Jiangsu Automobile Trade Management Association, which represents dealers in the eastern province, has repeatedly complained to FAW-Toyota about its sales practices.
The association said 30 of 34 FAW Toyota dealerships in Jiangsu were losing money, partly because they were obliged to buy a set number of cars from FAW Toyota or face penalty fees.
But with Chinese dealers becoming more vocal, and united, in their dispute with manufacturers over who should bear the brunt of the market slowdown, there are signs that the balance of power could be shifting.
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