FAW Toyota halts production due to sales slide

Shanghai, December 25 (Gasgoo.com) FAW Toyota said its Tianjin plant will halt production on Dec. 26 - Jan. 5 "for the routine mechanical overhaul" and the facility's staff will have ten days off. But actually it is the sales slide and oversupply that have brought the joint venture's production to a halt, state media said today.

In the first half of this year, FAW Toyota posted remarkable sales growth, but since July its sales have been sliding down.  In November the company only sold 23,051 vehicles, a record monthly low, and the total sales of 321,434 units in the first 11 months made the full-year 400,000-unit target an impossible mission. Obviously its supply must have exceeded the market demand.

An insider of the company revealed that in recent weeks FAW Toyota has cut two hours from each working day to reduce the output, and the year-end bonus for its workers will become an open question.

The sales of the joint venture, which makes many Toyota models for the Chinese market, will also affect Toyota Motor's performance in China. The New Toyota Vios made by JV only sold 1,428 units last month. The low sales of many models have forced the company to halt production to ease the oversupply.

This can't be the final solution to the problem. Many other automakers have been weathering this chilly winter crisis by cutting their worforces and expenditures, among others. It remains to be seen what Toyota and its Chinese ventures will do after the "overhaul" of its Tianjin facility.