In the past two years, Toyota has undoubtedly been the world's best-selling and most profitable car manufacturer. But this year, negative news such as fraud scandals, quality testing fraud, car recalls, and production shutdowns have shrouded this automotive giant like dark clouds.
As the fraud scheme was exposed this year, Toyota's half year financial report showed its first profit decline in two years. Its recently disclosed financial report for the first half of the 2025 fiscal year (April September 2024) shows that the company's operating profit for the first half of the fiscal year was 2.46 trillion yen, a year-on-year decrease of 3.8%. Among them, in the second fiscal quarter (July to September 2024), net profit "halved" year-on-year to 573.7 billion yen, marking Toyota's first quarterly profit decline in two years.
Meanwhile, Toyota's global production has decreased for the first time in four years due to production shutdowns caused by recalls. In the first half of the fiscal year, it produced a total of 4.71 million cars, a year-on-year decrease of 7%. In terms of sales, Toyota's global sales decreased by 4% year-on-year to 4.556 million vehicles.
Or perhaps due to this underperforming financial report, Toyota recently announced that it has lowered its global sales forecast for 2024 from 10.95 million vehicles to 10.85 million vehicles, taking into account factors such as global economic fluctuations and supply chain challenges.
But interestingly, as Toyota lowered its global sales forecast for 2024, there were rumors of plans to increase production in China. In other words, in the current difficult situation, the world's largest automaker may choose to break through by strategically shifting its focus to the Chinese market, the world's largest automotive market.
"Annual production of 2.5 million vehicles in China by 2030"
Recently, foreign media reported that three insiders said that Toyota plans to increase its production in China, with the goal of producing at least 2.5 million cars annually by 2030, "highlighting Toyota's ambition to regain business that has been taken away by BYD and local Chinese companies in recent years.
Among them, two insiders said that the company's goal is to increase its annual production in China to 3 million vehicles by 2030. The data shows that Toyota's car production in China in 2022 and 2023 will be 1.84 million and 1.75 million respectively. To achieve its highest goal, the company's production capacity needs to increase significantly by 63% in the next five years.
It is reported that the above plan has never been reported before. At present, Toyota has not publicly released the plan, but the company has communicated with some suppliers to ensure the stability and safety of its supply chain in China.
Toyota said in a statement in response to the media, "Due to fierce competition in the Chinese market, we are constantly considering various measures." It also stated that it will continue to be committed to manufacturing better cars for the Chinese market.
The report also stated that Toyota will delegate development tasks to Chinese employees who have a better understanding of local market preferences, especially in the areas of electric and connected car technology. Toyota is increasingly realizing internally that it needs to rely more on local employees to be responsible for and accelerate product development in China. Otherwise, it will be too late, "said a source familiar with the matter.
In fact, Toyota is already "late" in the Chinese market.
Especially in the field of electrification, while Toyota maintains a cautious attitude of "neither too fast nor too slow" in exploring, BYD and domestic new forces in car manufacturing have quickly captured most of the market.
It is worth noting that Toyota has been laying out the development of electric vehicles for a long time. As early as 1997, Toyota began researching nickel hydrogen batteries and entered the field of solid-state batteries in 2008. However, its first mass-produced pure electric vehicle, bZ4X, did not land until 2022.
The Toyota bZ4X is a mid size SUV built on a pure electric platform, positioned in the mid to high end market. However, since its launch in 2022, its sales performance has not been ideal and it is facing challenges globally.
Among them, in the Chinese market, the Toyota bZ4X performed particularly poorly. According to data from automobile sales websites, its cumulative sales volume in China for the whole year of 2023 is 6152 vehicles; Since 2024, its cumulative sales have only been 13 vehicles.
It can be said that Toyota's first attempt in the pure electric field was a complete failure.
The failure of Toyota bZ4X may be related to its market positioning.
The mid to high end pure electric SUV market targeted by this model is the most fiercely contested segment for domestic pure electric vehicle models.
In terms of brand image, Toyota has long maintained a stable and practical image in the Chinese market. But in the field of electrification, which pursues fashion and technology, Toyota, which focuses on practicality and durability in design, clearly lacks brand competitiveness.
In addition, based on consumer feedback, the Toyota bZ4X also has its own "weaknesses" in terms of range, performance, and user experience.
Although pure electric vehicles only account for a tiny fraction of Toyota's sales in the Chinese market, the pressure it faces in the field of electric vehicles has also been transmitted to its overall performance in China.
In 2022, Toyota's pure electric vehicles were launched, and that year, Toyota's sales in China also experienced their first decline in a decade, with a slight decrease of 0.2% year-on-year. In 2023, Toyota's sales in China were approximately 1.9076 million vehicles, a year-on-year decrease of 1.7%, with the decline further expanding. According to the latest financial report, Toyota's sales in China decreased by 8.87% year-on-year to 496000 vehicles in the second fiscal quarter; In the three quarters of this year, its cumulative sales were 1.355 million vehicles, a decrease of 9.64%.
[align center] plagued by fraud scandals
