Friday, March 10, 2006

Toyota in China: Full Speed Ahead

Who will be the biggest rivals for Toyota in China? Will it be local players?
China is a sizeable auto market, so it can have several local players. It seems to me that the pure, privately [funded manufacturers] like Geely or Chery are the ones to watch, and Hyundai [of Korea]. [The challenge] will be both international and local.

Are you concerned about profitability in China?
One thing in China is that there are no price increases for the near future -- it's always downwards. Everyone looks at China as a growing market, so they prepare more capacity. That means there's always some overcapacity somewhere and pressure on prices. China used to be a very profitable market for everybody, but now it's becoming like any other market.

But you're confident Toyota can succeed in China?
We're a minor player in the China market, with a 3.5% share, but we're one of the few manufacturers where demand exceeds supply. Even though we see big potential for growth, we will make sure we're not in a position of overcapacity. That will be a very key element. And as long as you retain the quality, treat dealers as partners, and avoid oversupply, the results will come. The race for the Chinese market is just around the first corner.



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