Gasgoo.com (Shanghai October 18) - Various news reports have been appearing recently alleging that Toyota is preparing to halt all production in China and leave the country. According to a report appearing in the Beijing News today, officials from Toyota's Chinese headquarters have denied these rumors as baseless. However, they confirmed that Toyota is in the process of modifying its production volumes in response to changing market conditions.
Rumors that Toyota would be abandoning the Chinese market started appearing in Nikkei and several Japanese newspapers earlier this week. They cited rising tensions between China and Japan, falling sales and increasing automobile inventory levels as reasons behind Toyota's decision to leave.
In response to these comments, Toyota China acknowledged that worsening relations between the two nations, brought on by the dispute over the Diaoyu Islands, has indeed affected the manufacturer's sales performance and caused logistics problems.
Along with its Chinese partners, Toyota owns factories in Changchun, Chengdu, Tianjin and other cities in the country. In order to maintain high efficiency and maintain healthy inventory levels, the manufacturer adjusts its production volumes in with market demands. With its sales, and those of other Japanese manufacturers, on the decline, Toyota has been reviewing production volumes for each of its factories. However, the manufacturer denies that this in any way equivalent to halting production or abandoning the market. "Each of Toyota's factories in the country is the result of Sino-Japanese cooperation, with its products made entirely for the Chinese market," an official source explained. "Therefore, both partners must negotiate together regarding production [issues]," the source stated, adding that neither party can unilaterally issue an order to halt production.
