TOYOTA Motor Corp officially opened the third factory of its Chinese venture yesterday, pinning high hopes on extending capacity and the new Corolla sedan in China to continue its lead against General Motors Corp worldwide.
FAW Toyota Motor Corp, the first Chinese venture formed by Japan's biggest car maker and First Automotive Works Group, invested 3.6 billion yuan (US$467 million) in the new plant, located in Tianjin in northern China, with an annual capacity of 200,000 units, a statement from Toyota said.
The new factory will lift the venture's total production capacity to 420,000 units in China.
Toyota formed a venture with Guangzhou Automobile Group Co in 2005, expecting to roll out 300,000 cars every year, including the Camry mid-to-high-class sedan as well as the upcoming Yaris compact.
The new factory kicked off operations when the first new Corolla sedan rolled off the assembly line yesterday, adding to FAW Toyota's existing production portfolio of Vios, Reiz and Crown sedans.
Analysts said the introduction of new Corolla, Toyota's most successful model with total sales exceeded 30 million units worldwide, will stir the economy car segment and is key target for Toyota in China.
"The localized production of new Corollas reflect the company's growing attention on the Chinese market," said Jiang Xueqin, an analyst from Shenyin Wanguo Securities Co Ltd. "It may not boost Toyota's sales in the short term, but plays a strategic role in catching up with rivals."
Toyota, which surpassed GM in terms of sales for the first quarter on the global market, is eager to expand sales in China after losing out to GM and Volkswagen over the past several years because of late market entry.
The world's second largest auto market, with an annual growth of 25 percent last year, is expected to play an important role in its ambitions to be the world's biggest car maker.
Toyota aims to sell 400,000 units this year in China, up from 380,000 units last year, before raising its share in the Chinese passenger car market to 10 percent in 2010 from 6.5 percent last year.
Last year, GM's sales topped 870,000 units with a 31 percent growth after setting up a complete line-up in four brands.