Toyota seeks China damage control

CEO’s move to speak in Beijing highlights importance of world’s largest vehicle market.

Akio Toyoda
Toyoda's visit appears aimed at shoring up his company's image battered by recent recalls [Reuters]

Toyota announced a recall of 75,552 units of its RAV4 sport-utility vehicle in China in late January.

The recall, due to an accelerator pedal problem, was a relatively small number out of the 8.5 million vehicles it has recalled worldwide since October for faulty accelerator pedals, floor mats and glitches in braking software.

Key market

But the Japanese car giant has ambitious plans for growth in China and the company has said its plans to expand in the Chinese market remain unchanged, with sales in the country expected to rise to 800,000 vehicles this year, up from 709,000 in 2009.

China’s overall vehicle sales increased by 45 per cent last year to 13.6 million, overtaking the US as the world’s biggest vehicle market.

And Toyota, which started relatively late in the country, remains behind competitors such as General Motors, Volkswagen and Nissan in vehicle sales.

Toyoda’s visit to China despite limited recalls there reflects the market’s importance [EPA]

Toyota rolled out its first made-in-China Camry in May 2006, in partnership with Guangzhou Automobile Group based in the southern Chinese market near Hong Kong.

It also has a partnership with FAW Group, another state-owned carmaker based in northern China.

Toyoda’s move to visit China, despite the limited number of recalls there, appears to reflect the company’s eagerness to restore its reputation for high quality that is its key advantage there.

“China is the biggest market for automakers, so Toyota can’t ignore its importance,” Mamoru Kato, an analyst at Tokai Tokyo Research Centre in Nagoya, told the Associated Press news agency.

“They have to hurry to overcome anxiety about the quality of their cars.”

At the congressional hearing in Washington last week, Toyoda admitted that his company’s rapid expansion may have led to the recalls.

He added that “priorities became confused” as the carmaker grew.

So far, China’s state-controlled media has made little comment on the recalls and the problem is mainly viewed as an example of the potential downfalls for China’s nascent car industry.

Source: News Agencies


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Published On 25 Feb 2010
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