China car market:
Sales at BYD Co., the Chinese carmaker backed by Warren Buffett, surged 162 percent, led by its F3 compact car, the nation’s best-selling model. Hyundai Motor Co., South Korea’s biggest automaker, increased sales 94 percent.
Carmakers in China benefited from a government program that cut the sales tax on cars with engines of 1.6 liters or smaller to 5 percent from 10 percent. The government said Dec. 10 it would raise the rate to 7.5 percent.
While Toyota’s Yaris, Corolla, Vios and Prius models qualify for the lowered tax on smaller cars, Chinese automakers sell competing models for less than half of Toyota’s price, said Seiki Shu, Fourin’s chief of China research.
Even as the tax incentives for small cars were implemented last year, Toyota began China production of the RAV4 and Highlander SUVs.
“All overseas carmakers will lose market share to the Chinese, but Toyota will continue to lag its foreign competitors,” said Koji Endo, managing director at Advanced Research Japan in Tokyo.
Neil Hu, a sales manager at a Toyota dealership in Beijing, said he has stopped charging a 5,000 yuan ($732) premium to customers who want to skip the waiting list for RAV4 sport- utility vehicles. He took the initiative after the Japanese carmaker recalled 75,552 of the SUVs in China last month to fix gas pedals that may stick.
“I heard the situation in the U.S. is pretty bad for Toyota,” Hu said. “The recall has impacted us as well.”
Toyota, which grew more slowly than competitors in China in 2009, will likely lose more market share and see a decline in local profit margin this year, analysts say. The carmaker has relied on a reputation for quality and safety to sell high margin, mid- to large-size models even as the world’s biggest auto market shifts to cheaper, smaller cars, encouraged by government incentives. businessweek.com
Toyota's passenger vehicles account for about 7.5% of the Chinese market. That's made the company the No. 2 brand in China. But top-selling Volkswagen commands about twice the market share, according to J.D. Power and Associates Inc.
Total vehicle sales in China grew by nearly 50% last year to 13.6 million, allowing China for the first time to surpass the U.S. as the largest auto market. About 10.4 million new vehicles were sold in the U.S. last year.
Chinese sales have been sluggish for Toyota, which has been focusing on larger cars at a time when the market has been favoring economical, fuel-efficient automobiles. Toyota's passenger car sales grew by 14% last year. By comparison, Hyundai grew by 87%, Nissan increased 46% and Buick expanded 59%. articles.latimes.com
Toyota has kept its sales target at 800,000 vehicles in China this year.
Market researcher JD Power's statistics show that Toyota's share of the Chinese passenger car market last year declined to 7.5 percent from 10.3 percent in 2008, and continued to drop to 6.6 percent in January this year.
"Toyota's market share in China is expected to decrease in 2010 and 2011, and climb back to about 7.5 percent in 2012," said Marvin Zhu, a senior market analyst at JD Power Consulting (Shanghai) Co Ltd.
According to Zhu, Toyota's RAV4 will take a hit in near-term sales but in six months will gradually return to its position as a principal model in the Chinese market, which has a strong demand for compact SUVs.
Toyota's China sales last year increased by 21 percent to 709,000 vehicles, far below the 52.9 percent growth in the overall passenger vehicle market.
Zhu said Toyota's overall sluggish performance in China should be mainly attributed to weakening competitiveness of its existing models - for example, its mainstream model Camry now faces more rivals in the compact car segment, like Nissan's Teana and Buick's LaCrosse.
JD Power predicts Toyota's sales this year will probably stay the same or see slight growth compared with last year. news.xinhuanet.com |
