No longer contented to its shallow operation in China auto industry, Toyota has started its biggest push into China auto industry, in which it has been running business for a long time. In recent days, Mr. Umehara¡¡Yuuji, General Manager of Toyota, says, Vios will further enlarge its productive capacity in hope of realizing that in May buyers could order and take cars at the same time.

 

As Mr. Umehara Yuuji introduces, the Vios production pattern has been adjusted from single shift to two shifts, and the production capacity rises from 1500 cars per month to 3000 accordingly. It is estimated that the monthly output could reach 5000 in May.

 

Meanwhile, Mr. Umehara Yuuji also hopes that Toyota's market share could reach 80% this year and Toyota Tianjin could be developed as the second largest manufacturing base next to Japan.

 

The year 2004 was a busy period when Japanese auto makers including, Toyota, Nissan, Honda issued new joint venture and cooperation plans which blows tornado in China's auto industry. On the eighth day of last October, Toyota, the largest auto maker in Japan, issued Vios, the first new car after long time brew in China, which turn to the new page of "Toyota made in China". Right on the next day, the land breaking ceremony was held in TEDA for the first phase project of Toyota plant, for which $300 million had been invested for Crown 3000 CC.

 

Facing with a huge gap between the production capacity of Toyota at 30,000 to 50,000 for the initiative phase and that of Volkswagen and GM at over 100,000, Toyota is now busy adjusting its strategy in China, which used to insist on selling only autos, but not technology and not making investment. "Japanese are no longer contented to its shallow operation in China auto industry, Toyota has started its biggest push into China auto industry" says Jia Xinguang, researcher in China Auto Industry Development Research Centre.

 

As FAW, Tianjin Auto and Toyota plan, the development goals of Tianjin auto industry are, from this year to 2010, a 2500CC to 3000CC medium and premium cars manufacturing base with annual production capacity of 150,000 will be built; a mini and multi-purpose cars plant with annual production capacity of 150,000 to 200,000; the production of Toyota NBC1 to NBC5 could be ensured at 150,000. If this blueprint could be realized, Tianjin is hopefully one of the largest automobile manufacturing bases in China and Toyota could realize its strategic purpose to take 10% of China's auto market.

 

"Obviously, Japanese auto makers have regarded China as their second strategic focus next to US market. To these primary auto makers, their strategy to pierce into China market has been completed, and they are now advancing as the expansion strategy plans" says Jia Xinguang.

 

As the tariff duty is lowering, Chinese government is to release its restriction policy on the auto sales system. The changes, coming along with China's access to WTO, have offered permission to Japan auto maker to intensify their strategy in China.

 

Although, Toyota and Nissan fall far behind Volkswagens and GM in the experiences of manufacturing autos in China and cooperation with Chinese partners, Japanese auto makers hope to exceed their competitors at the entry to China market. Based on this competition strategy, Toyota breaks rules to install GPS system on Vios, the first brand made in China. And the application range has expanded from 4 cities of Beijing Shanghai to 22 cities with the added Wuhan, Qingdao and Hangzhou, in which the GPS is utilized. The designer of Vios are strongly convinced that GPS application is the best advertisement which distinguishes Vios from the like products of other brands.

 

The smart Toyota positions Vios between two mature products of Volkswagen POLO and BORA, in hope of taking a hitch-hike to segment this mature and most potential purchaser group set up by Volkswagen.

 

"We think the potential auto purchasers are those who can accept 150,000 to 200,000 RMB. They are the largest auto purchasing group in China." says Hasegawa Tosi, formal general manager of Toyota Tianjin.

 

However, Toyota has already missed the high-return period that Volkswagen and GM have enjoyed in China. Just like other auto makers, Toyota and Nissan have to face the increasingly fierce price war, cost pressure by small sales and the operation risk before they have time to set up the auto financial credit system.

 

Therefore, to lower the investment risk, the prudent Toyota rationally postponed the sales summit of Vios to the spring of 2003. After half year's warm-up, Toyota will launch its intensive market aggression, which makes a sharp contrast to the advertisement bombing frequently adopted by Volkswagen and GM.

 

As the sales increasing, Toyota Tianjin will further set up sales network. As Mr. Kotani Tosio, general manager of Toyota (China) Investment Ltd. released, the sales agents will increase from 50 to 100 nationwide this year, mainly located in the coastal regions where there is a large auto demand.

 

Currently, there are increasing new cars in the market, but the life-cycle period is decreasing. The sale of Vios goes well in domestic market, but Toyota prepares foul in fair weather. Vios, Vitz and the to-be-made Crown in 2004 and Corolla in 2005, will drive Toyota forward.