Toyoda slips into China on damage control mission

 @ibtimes
on March 01 2010 8:08 AM

Toyota Motor Corp President Akio Toyoda sought to ease quality concerns during a low-key visit to China on Monday, fresh from a grueling hearing in the U.S. Congress over his company's biggest safety crisis.

Toyoda flew directly from the United States to China to meet with government officials and local reporters, according to media reports, underscoring the importance of an auto market that surpassed the United States last year to become the world's largest.

He's making this trip because China has become the biggest auto market, in which Toyota underperformed last year, from low-end products to high-end ones, such as Lexus, said IHS Global Insight analyst John Zeng.

If Toyota loses China, its global position would be challenged.

Even as auto sales contracted in most major global markets last year during the recession, China's vehicle sales jumped 53 percent to 13.6 million units, as consumers purchased cars under a raft of government incentives as part of Beijing's 4 trillion yuan ($585 billion) economic stimulus package.

Toyota, which produces cars in China in tie-ups with FAW Group and Guangzhou Automobile, sold 709,000 cars in China last year, up 21 percent from the previous year. But that accounted for a relatively modest 5 percent of the market.

Japanese automakers such as Toyota and Honda have been relative bit players in China to date, with U.S. and European giants including General Motors, Volkswagen and Ford moving much more aggressively.

Toyoda was planning to meet with officials from China's quality control bureau, according to the reports, and was set to attend a briefing for local and international media in Beijing at 6 p.m. (1000 GMT).

LOW KEY

A Toyota spokeswoman in Tokyo said Toyoda was in China to discuss quality issues, but would not elaborate. She confirmed that Akira Sasaki, chief officer of China operations at Toyota Motor Corp, and Managing Officer Masahiro Kato were traveling with Toyoda.

The low-key visit to China, with little advance notice and limited public appearances, contrasted sharply with Toyoda's high-profile showing last week before the U.S. Congress.

Toyoda was grilled by U.S. lawmakers for a series of recalls that have tarnished the carmaker's brand and reputation for quality, particularly in the United States, its largest market.

Toyoda also met with U.S. safety officials as well as workers and dealers while in Washington.

Toyota has recalled more than 8.5 million cars globally for unintended acceleration and braking problems, in a widening safety crisis that broke about a month ago. The bulk of the recalls are in the United States.

By comparison, Toyota's China woes have been relatively limited so far, with the company recalling 75,552 RAV4 vehicles there due to faulty accelerators.

Toyota said in November it was aiming to sell 800,000 cars in China this year, up about 13 percent or roughly in line with gains of about 10 percent that most analysts are expecting for China this year. The company's January car sales in China surged 53 percent to 72,000 units.

(Writing by Doug Young; Additional reporting by Kiyoshi Takenaka in Tokyo; Editing by Ken Wills and Lincoln Feast)

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