Toyota has decided to build a new electric vehicle manufacturing facility in China, a move aimed at reclaiming lost ground against Chinese-owned rivals like BYD that have been eroding its market share.
According to a recent report in Nikkei Business Daily, Toyota is planning to launch its luxury brand Lexus at a new manufacturing facility in Shanghai, as cited by Reuters. While Toyota has yet to officially confirm the news, multiple anonymous sources told Nikkei that the company is indeed moving forward with the decision.
Toyota’s joint venture efforts are split, but roughly half stems from its partnerships with GAC Group and FAW Group, which drive the majority of its Chinese sales. Despite this, the new manufacturing facility will operate autonomously, with reports suggesting Toyota is seeking similar incentives as those enjoyed by Tesla in the country, including tax breaks, land grants, and support for direct investment and management of factories within the nation without the need for a joint venture partner.
Toyota aims to initiate operations at its new plant around 2027, according to the report.
Despite being the world’s largest automaker, Toyota has experienced a decline in its market share in China, partly due to the growing popularity of cars produced by other Japanese manufacturers and the increasing presence of Chinese auto brands on the market. The corporation aims to manufacture no fewer than 2.5 million vehicles annually in China by 2030, seeking to gain ground against formidable rivals such as BYD, according to a Reuters report in November.
The Toyota bZ3X electric SUV has triggered preorders in China, kicking off at an affordable $13,800 or 100,000 yuan.
