Japanese legacy automaker Toyota has started reducing its workforce in China amid the growing adoption of electric vehicles in the world’s largest auto market, Reuters reports.
Toyota faces increased pressure amid China’s price war
Traditional automakers from Japan are faltering in the Chinese auto industry as EV uptake continues to solidify.
As per the report, the joint venture between Chinese automaker GAC and Toyota just laid off approximately 1,000 dispatch workers. The move is apparently due to the increasing pressure brought on by the price war in China.
In return, the JV provided an undisclosed amount of compensation, according to the three of the affected workers.
Notably, Toyota’s JV in China currently has about 19,000 employees for the bZ4X production, along with the Levin and Camry vehicles.
In retrospect, the Japanese automaker brought its maiden EV into the Chinese EV market last October. It has a base price of 199,800 yuan or approximately $19,000.
However, BYD and Tesla’s major price cuts adversely affected Toyota’s sales, leaving the Japanese automaker in the dust.
For context, Toyota’s bZ4X sales through January only hit 3,844 units. It accounts for a mere 0.26% of the country’s overall EV sales.
In effect, Toyota was prompted to also cut prices by 15% to a base price of about 169,800 yuan ($24,800) in early February. Despite that, Toyota’s EV sales fell 9% in the first half of 2023.
Notably, Toyota also launched its new bZ3 in China this year with a base price of 169,800 RMB
($24,680).
All that said, Toyota’s new CEO Koji Sato aims to accelerate the company’s electrification strategy, especially when he realizes the significance of EVs following the 2023 Shanghai Auto Show.
“We need to increase our speed and efforts to firmly meet the customer expectations in the Chinese market.”
Toyota CEO Koji Sato
See Also:
- Toyota to launch aggressive EV push in China
- Toyota bZ3 with BYD technology formally launched in China
- Toyota develops solid-state batteries to boost its electrification efforts
- The Tesla Way: Toyota turns to US EV-maker for manufacturing expertise
- Over 2 million Toyota owners were at risk in a decade-long vehicle data leak
China Association of Automobile Association stated that Japanese brands’ market share in the country fell to 14.9% in H1 2023 from 20% in 2022. This poor performance is unsurprising, given how they lack EV models to sufficiently rival local automakers.
All that said, Toyota must start adopting electric vehicle technology quickly to guarantee its business prospects in the coming years as more customers shift to clean energy models.
