Toyota Motor Corp. is finalizing tieup talks with Guangzhou Auto Group Corp. to jointly produce cars in China, company sources said Wednesday.
The deal would give Toyota a fourth production base in China. By joining hands with the leading automaker based in Guangzhou, Guangdong Province, Toyota apparently aims to strengthen its efforts in the rapidly growing Chinese market.
It will be Guangzhou Auto Group's second tieup with a major Japanese automaker; it already produces vehicles with Honda Motor Co.
After receiving the approval of the Chinese government, Toyota and Guangzhou Auto Group will establish a new factory in Guangzhou and begin production there in 2005, at the earliest, the sources said. The automakers will also establish a sales company.
The automakers will initially produce tens of thousands of vehicles a year and will increase the number to around 300,000 units by the end of 2010, the sources said.
As a result, the number of cars Toyota plans to produce in China will top 700,000 by that time from its earlier forecast of 400,000.
The firms are focusing on a plan to produce Toyota's Camry midsize car in Guangzhou, the sources said.
Toyota is already jointly producing the Vios compact sedan, its first car assembled in China, with China's Tianjin FAW Xiali Corp., based in Tianjin near Beijing.
Toyota and China FAW Group Corp., China's biggest carmaker, which has Tianjin FAW Xiali under its wing, have agreed to jointly manufacture four types of motor vehicles, including the Crown, a large-class luxury sedan, and the Corolla, in China by 2005.
Guangzhou Auto Group is jointly producing Honda's Accord and Odyssey.