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Toyota sets a bold goal: 2.5 million cars annually in China by 2030 amidst EV market showdowns

Toyota is setting new aggressive targets for its production in China by increasing its annual vehicle production to at least 2.5 million by 2030, according to Reuters. It is different from what other global automakers are doing are leaving China.

The Japanese automaker is looking to further integrate its Chinese sales and production arms in a move that will have the local managers more in control of development. Toyota's aim for its production may hit 3 million vehicles annually by the end of the decade, which will jump 63% from last year's record at 1.84 million. Still, Toyota hasn't announced its official target.

Meanwhile, a new play by Toyota is to claw back lost ground against local players, particularly electric vehicle manufacturers such as BYD. "With the intense competition in the Chinese market, we are constantly considering various initiatives," Toyota said, restating its commitment to producing "ever-better cars" for Chinese consumers. Toyota's new strategy reflects an appreciation for local knowledge in development. "It's going to be too late if we wait," said one insider, referring to relying on local staff for quicker product development.

Unlike most rivals, Toyota is betting on deeper local integration with some of its joint ventures, such as FAW Toyota Motor and GAC Toyota Motor, to capture their knowledge of local demand. In the future, each model will be jointly produced by one of the partners but sold by both. Japanese automakers are increasingly feeling squeezed from the growing rivalry with Chinese brands of electric vehicles.

Mitsubishi has withdrawn from the Chinese market while Honda and Nissan reduced their local car production. Operating income from China fell in the first half of Toyota's financial year mainly because the automobile manufacturer increased marketing against the cheap Chinese brands. However, the motive of Toyota to ensure its suppliers' protection and maintain its supply chains indicates that Toyota will not exit China, no matter what happens in the market.