Toyota extends output cut at Chinese JV to To Navigate Challenging Market

Toyota Motor Corporation is reportedly telling dealers that it will extend a programme to reduce output at one of its joint ventures in China, where it is facing increased competition.

As a result, the number of vehicles sold to Toyota dealers is expected to fall to 66,000 units in December, 60,000 in January, and 38,000 in February, according to Reuters, citing a letter verified with one of the dealers.

According to a letter dated November 3 from Toyota's joint venture with China's state-owned FAW Group, the reduction, which was originally scheduled for October and November, will be extended for an additional three months.

The goal is to reduce the inventory burden on dealers and ensure their ability to function effectively in the challenging market landscape.

"Production from December to February next year will continue to be significantly reduced," FAW Toyota said, as reported by Reuters.

Toyota also terminated the contracts of approximately 1,000 temporary workers at its joint venture with Guangzhou Automobile Group Co., Ltd. in July due to production volumes. "Every time we faced the danger of being unable to make cars, everyone worked together to restore or adapt production," said President of Toyota Koji Sato in a statement yesterday, where the company revealed that it has reached a cumulative global production total of 300 million cars, including production numbers for September 2023.

Toyota, which came in third in the Chinese market after BYD Co., Ltd. and Volkswagen AG, sold 1.265 million vehicles to dealerships in the first three quarters, according to data from the China Association of Automobile Manufacturers, as reported by Reuters. According to Reuters, this represents a 9% decrease from the same period last year.