Teams in China will lead the development, as they have a better understanding of local preferences
Toyota is intensifying its efforts in the Chinese market, setting a goal to produce up to 3 million vehicles annually in the country as it works to regain market share lost to fast-growing domestic brands like BYD. This move indicates Toyota’s recognition of the challenges it faces in the world’s largest car market, where local brands have gained ground by offering competitive, well-suited products that appeal to Chinese consumers.
According to three anonymous sources cited by Reuters, Toyota plans a major production increase in China by the end of the decade, although no formal target has been set. This would mark a significant rise from the 1.75 million vehicles Toyota produced in China last year and a 63% jump from the 1.84 million it built in 2022, a record for the company.
The same sources report that Toyota has informed some of its suppliers about the planned production increase. The company also intends to bring its two Chinese joint ventures closer together to boost efficiency and plans to empower local teams to lead much of the development, leveraging their understanding of Chinese consumer preferences.
Toyota further aims to consolidate vehicle production across its joint ventures into a single operation. While models will be produced at one location, they will still be offered across both dealership networks, indicating a more unified approach to its previously fragmented local strategy.
Though Toyota has not commented on the specifics of the report, it acknowledged the challenges it faces in China. “With the intense competition in the Chinese market, we are constantly considering various initiatives,” the company stated.
Toyota’s struggles are not unique among legacy automakers in China. Established brands like Honda and Nissan have already reduced their production capacity, while Mitsubishi has exited the market entirely. Meanwhile, local companies like BYD are quickly advancing, offering appealing products at competitive prices that resonate with Chinese buyers.
Toyota has made some attempts to localize its offerings. For instance, the bZ3C—a fully electric sedan designed specifically for China—features a lithium-iron-phosphate battery from BYD’s FinDreams division, providing a range of 500-600 km (310-372 miles).
