Toyota Motor Corp. will invest over $2.2 billion (¥242 billion) in China to boost eco-friendly vehicle and engine production with a local partner to meet growing demand.
Toyota plans to add 400,000 units to its annual production capacity for eco-friendly cars at GAC Toyota Motor Co. in Guangzhou, southern China, its Chinese partner Guangzhou Automobile Group Co. said. The target for additional units is equivalent to two-thirds of last year's output.
GAC Toyota Motor, owned equally by Toyota and the Chinese partner, will invest $1.6 billion to expand production capacity in two phases scheduled to complete in 2022, Guangzhou Automobile said in a statement.
Toyota says the output of Toyota brand cars, including hybrid Camry sedans, at the Guangzhou manufacturing unit totaled 599,000 units last year.
Toyota and its Chinese partner will also step up engine production at GAC Toyota Engine Co. in the capital of Guangdong province. They are earmarking $605 million to add 432,000 engines to annual output capacity by 2021 as part of efforts under Toyota New Global Architecture, a program to enhance production quality and reduce costs with the introduction of a new vehicle platform, the statement said.
Toyota has not made public the engine production capacity of GAC Toyota Engine, which is 70 percent owned by Toyota and the remainder by the Chinese automaker.
"We will implement various measures to accelerate business in China," said a spokesman for Toyota Motor (China) Investment Co., a local unit in charge of public relations and other activities.
In China, 2018 sales of new-energy vehicles, like electric vehicles and hybrid cars, surged 61.7 percent to 1,256,000 units, according to the China Association of Automobile Manufacturers.
Those sales are expected to grow further this year, increasing at least 400,000 units to 1.6 million, the industry group predicts.
