Automotive News

Shanghai, May 19 (Gasgoo.com) Its sales slump in the first few months has urged FAW Toyota to change its production strategy. With the launch of new models of Corolla and Corolla EX, the joint venture has started to boost the output of its sub-1.6L cars to benefit from China's stimulus policy for small vehicles, said sina.com today.

In the first quarter, FAW Toyota sold 63,005 vehicles, down 30% from a year earlier, and its rankings fell from 5th to 10th among China's passenger car makers. In April, the company's sales reached 30,256 vehicles, down 12.1% year on year, while GM, Volkswagen, Nissan and other global carmakers saw their sales grow considerably in the fast-recovering China market.

Since the beginning of this year, the Chinese government has released a slew of auto support plans, including cutting the sales tax by half to 5% on small cars with engines of 1.6 liters or less as from January 20, and this small-car stimulus policy will run through the end of this year.

Boosted by these incentives, China's auto sales recovered in the first four months this year from the downturn of late 2008. Sales of small vehicles rose rapidly and contributed most to the total sales growth of the auto market.

FAW Toyota's 1.6-liter and smaller new Corolla and Corolla EX models are joining the ranks of China's hot-selling small cars, and are expected to help the company's reverse its sales slump of the first few months.