Akio Toyoda, senior managing director of Toyota Motor Corp., was handling himself deftly at a news conference at the international auto show in Beijing in early June when he suddenly found himself in the hot seat after a reporter asked him about the automaker’s joint venture in China.
“We were looking forward to hearing good news in May,” the reporter said in reference to the Chinese government’s delay in granting permission so that Toyota and Guangzhou Motor Corp. can jointly produce cars.
“We are now at the stage of waiting for government approval,” Toyoda said as if speaking from talking points. He then abruptly switched to briefing reporters on other Toyota projects that no one had asked him about.
The question appeared to humiliate him, as it suggested that Toyota — the world’s biggest automaker in terms of market value — is lagging behind its rivals in this area, and in fact, he could not mask his rage.
The incident provided a small glimmer into the difficult challenges that one of the world’s most powerful companies faces when doing business with China.
Toyota trails far behind its American and European rivals in the Chinese market. It was hoping that a joint venture with Guangzhou Motor Corp. would offer a chance to make bigger inroads in the Asian giant.
Toyoda — the 48-year-old Toyota executive who is directly involved in the matter — is also the grandson of Toyota’s founder.
Sometimes referred to in the Japanese media as the “prince” of the auto industry, Toyoda is certain to become Toyota’s top leader in the near future, and therefore cannot afford to fail in this undertaking, because it would spark criticism that he got the job because of his family ties.
In other words — it is a battle in which the family’s honor is at stake.
Toyota threw the Camry, the sedan that made a big splash in the North American market, into the joint venture with Guangzhou Motor.
The Chinese government has permitted Toyota to manufacture the automobile’s engines, while it deals with the joint venture at a snail’s pace.
The government finally approved an itemized written proposal — the first step toward the start of car production — at the end of July, a year after Toyota and Guangzhou agreed on the venture.
It seemed almost impossible for them to begin manufacturing and selling the Camry at the start of 2006. So they worked out the plan with an eye on 2008, which is expected to be a peak year for car demand as Beijing will host the Summer Olympics.
Some 4.44 million vehicles were manufactured in China in 2003, including about 2.22 million cars. Others were commercial vehicles, including trucks.
Volkswagen topped all others with some 700,000 units, far outclassing second-placed General Motors, whose production totaled 200,000 units.
Suzuki Motor Corp. placed third with 140,000, followed by Honda Motor Co. with 120,000.
Toyota was in ninth place with just 50,000 units, accounting for only 2 percent of the Chinese car market.
Toyota has seemed to hit a great wall in China.
One rumor that has long circulated in Japanese auto circles is that the late Chinese leader Deng Xiaoping, who visited Toyota in Japan shortly after Tokyo and Beijing normalized ties in 1978, was nonplussed when he asked Toyota to make inroads into China, and a Toyota executive responded with a cold smile by saying: “Just how long would it take for Chinese people to be able to buy our cars?”
The remark reportedly enraged Deng, and after he returned home he was said to have told his subordinates: “Don’t let Toyota manufacture even a single car on the Chinese continent in the next 30 years.”
Of course, Toyota denies the rumor. But many wonder whether “Deng’s will” is the reason that Toyota has encountered such a tough battle in China.
New vans launched
Toyota Motor Corp. has launched fully remodeled Hiace and Regiusace vans featuring spacious interiors and improved safety functions, the company said Monday.
The new Regiusace and Hiace models cost between 1.71 million yen and 2.98 million yen.
The vehicles are also more environmentally friendly, with their engine emission levels some 50 percent below the 2005 standards stipulated by the government.
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