China carmaker GAC Toyota to boost production by 50pc in 2017
GAC Toyota Motor, a joint venture Chinese carmaker renown for its popular Camry and Highlander-branded sedans, vows to boost production capacity by as much as 50 per cent with the implementation of a new manufacturing line next year, a company executive said.
The car giant founded by state-owned GAC Group and Japanese titan Toyota Motor Company set an annual target of 600,000 vehicles starting in 2017, a jump from about 400,000 in 2015, executive deputy general manager Li Hui said on Friday during the 2016 Guangzhou Auto Show.
“We are introducing a third production line that will significantly beef up our manufacturing, while we also expect to help our dealers double their profits within three years,” Li said.
The new assembly line to be put in place by 2017 is expected to churn out as many as 220,000 new vehicles annually when running at full strength, according to the Guangzhou-based carmaker.
But that is still significantly smaller in production scale compared with GAC Honda, another GAC’s joint venture with a Japanese carmaker, which has been making millions of vehicles every year in China.
GAC Toyota Motor has been competing head to head with rivals such as Dongfeng Nissan and Dongfeng Honda and is now raising its bets on hybrid vehicles to win greater market share amid strong competition.
“We see our hybrid car production on track to reach 32,000 by the end of 2016, which will be a 300 per cent jump from the year earlier,” said Yamauchi Kobayashi, general manager with GAC Toyota, while unveiling at the trade fair a family-friendly YARiS L model that will be ready to take Chinese orders starting the first quarter of next year.
“This model is designed for young people who aspire to buy their first car for themselves or buy for their family,” he said.
Kobayashi signalled more “breakthroughs” by the company in the urban-friendly, small-sized car market segment going forward.
Ten years into its launch, GAC Toyota on Friday also unveiled a replacement for its old logo which only showcased Toyota with a new one featuring the the best-selling GAC Trumpchi sedan on the left and Toyota’s logo the right.
“Today is a big day,” Kobayashi added. “The brand new corporate logo reflects the mutual trust and close corporation between us.”
The Trumpchi series produced by GAC — the nation’s sixth largest carmaker — has been one of the best selling SUV models in China. Experts predicted the latest marketing move would help boost the popularity of Trumpchi as the new GAC-Toyota logo gains wider publicity in China.
Analysts say Chinese carmakers that operate joint venture units with Western peers, including SAIC-Volkswagen and SAIC-General Motors, have made similar attempts to bolster their own brand recognition by highlighting their close ties with their European and US partners, whose vehicles are generally considered to have premium value.
“It makes sense for GAC to make such a move, as Trumpchi itself is its best performing brand, but the problem is that the entire industry is facing headwinds amid a sluggish economy and lukewarm demand,” said John Zeng, a Shanghai-based director with automobile consultancy JD Power.。
Analysts say China’s car market, already the largest in the world, would see its growth rate decline sharply next year after Beijing’s car purchase tax breaks expire at the end of this year.