Toyota picks up speed in China, aims for 10% share
10-20-05, 08:29 AM
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Toyota picks up speed in China, aims for 10% share
Toyota picks up speed in China, aims for 10% share
By Christine Tierney / The Detroit News
SHANGHAI -- When Ralf Schumacher roared past the checkered flag to clinch a third-place finish at the Chinese Grand Prix, Toyota Motor Corp. engineers and executives burst into applause. A relative newcomer to Formula One, Toyota finished a respectable fourth, its best showing in the three years since its entry.
That methodical progression also characterizes Toyota's efforts in the Chinese auto market, which it entered in 2002, long after most of its rivals.
Toyota was wary -- and remains wary of China's centrally planned market, where foreign automakers are required to partner with local companies to set up production operations. In its first year, the automaker stumbled badly with a pair of ill-advised advertisements that evoked Japan's imperial past in China.
Trailing rivals
The Japanese automaker still produces only a third as many vehicles as General Motors Corp. Toyota also trails Honda Motor Co. and has only around half the market share of South Korea's Hyundai Motor Corp., which entered the Chinese market at roughly the same time.
"Compared with the other Japanese, Toyota didn't feel hurried," says Yale Zhang, Shanghai-based auto analyst for CSM Worldwide.
"That's our regular way of coming into a market," says Yoshimi Inaba, the former head of Toyota's U.S. sales arm who now runs its China operations.
Plans to accelerate
But now Toyota is picking up speed in the Chinese market, the world's third-largest with estimated sales of 5.8 million vehicles in 2005. In the next year or so, China is expected to overtake Japan to become the second-biggest market after the United States. By 2010, Toyota aims to more than double its share of the Chinese market to 10 percent.
It is beefing up its lineup, building up its network of dealers, which number fewer than 200, and its supplier base. Toyota is also introducing the Lexus brand to China, and it is the first automaker to announce plans to assemble a gas-electric hybrid car in China.
Already, Toyota is turning up the heat on rivals. Last month, it priced the new Toyota Mark X, a sedan a notch above the Camry, below Honda's popular Accord. That suggests the Camry it will build next year in China will come out with an even lower price, says Zhang. With car prices falling in China as new players enter, including ultra-low-cost local manufacturers, the winners in the long run are likely to be carmakers with the most efficient and low-cost operations, as well as the most appealing products.
From Inaba's standpoint, and Toyota's long-term view, the current jockeying in China isn't unlike the initial laps of long Formula One races. "This is just the beginning," Inaba says.
http://www.detnews.com/2005/insiders...C01-354122.htm
By Christine Tierney / The Detroit News
SHANGHAI -- When Ralf Schumacher roared past the checkered flag to clinch a third-place finish at the Chinese Grand Prix, Toyota Motor Corp. engineers and executives burst into applause. A relative newcomer to Formula One, Toyota finished a respectable fourth, its best showing in the three years since its entry.
That methodical progression also characterizes Toyota's efforts in the Chinese auto market, which it entered in 2002, long after most of its rivals.
Toyota was wary -- and remains wary of China's centrally planned market, where foreign automakers are required to partner with local companies to set up production operations. In its first year, the automaker stumbled badly with a pair of ill-advised advertisements that evoked Japan's imperial past in China.
Trailing rivals
The Japanese automaker still produces only a third as many vehicles as General Motors Corp. Toyota also trails Honda Motor Co. and has only around half the market share of South Korea's Hyundai Motor Corp., which entered the Chinese market at roughly the same time.
"Compared with the other Japanese, Toyota didn't feel hurried," says Yale Zhang, Shanghai-based auto analyst for CSM Worldwide.
"That's our regular way of coming into a market," says Yoshimi Inaba, the former head of Toyota's U.S. sales arm who now runs its China operations.
Plans to accelerate
But now Toyota is picking up speed in the Chinese market, the world's third-largest with estimated sales of 5.8 million vehicles in 2005. In the next year or so, China is expected to overtake Japan to become the second-biggest market after the United States. By 2010, Toyota aims to more than double its share of the Chinese market to 10 percent.
It is beefing up its lineup, building up its network of dealers, which number fewer than 200, and its supplier base. Toyota is also introducing the Lexus brand to China, and it is the first automaker to announce plans to assemble a gas-electric hybrid car in China.
Already, Toyota is turning up the heat on rivals. Last month, it priced the new Toyota Mark X, a sedan a notch above the Camry, below Honda's popular Accord. That suggests the Camry it will build next year in China will come out with an even lower price, says Zhang. With car prices falling in China as new players enter, including ultra-low-cost local manufacturers, the winners in the long run are likely to be carmakers with the most efficient and low-cost operations, as well as the most appealing products.
From Inaba's standpoint, and Toyota's long-term view, the current jockeying in China isn't unlike the initial laps of long Formula One races. "This is just the beginning," Inaba says.
http://www.detnews.com/2005/insiders...C01-354122.htm
(I know MB is doing just that.)
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