FAW Toyota to delay Changchun plant project

Shanghai, March 25 (Gasgoo.com) Sichuan FAW Toyota Motor Co., a joint venture between Toyota Motor and China FAW Group, may reconsider or delay its 4 billion yuan ($585 million) new plant project in Changchun city, Jilin province, due to the financial crisis and capacity surplus, National Business Daily reported today.

Amid the global financial crisis, Toyota Motor has suffered its first losses in 59 years and has to reconsider or postpone its overseas new facility projects, with those in Thailand and India already cancelled. FAW Toyota's new Changchun plant construction, after a groundbreaking ceremony in late October 2008, has not started yet at the scheduled date.

The plant, Toyota's sixth with FAW, was designed to have an annual production capacity of 100,000 units, with the Corolla listed as the car model for manufacture in the facility, and was planned to start production in 2010.

The Chinese partner FAW Group has injected its initial investment of 300 million yuan in the project and has got ready a 500 million yuan loan from a local bank in Changchun. But Toyota Motor has not injected its fund in the new plant project nor declared its intention yet.

Asked when Toyota will start to construct its new plant in Changchun, an executive of Toyota China replied that the project has no specific timetable now and will be decided by the market demand. Construction of the plant was originally scheduled for March 2009.  

FAW Toyota has a total capacity of 440,000 vehicles in China, but in 2008 the joint venture fell short of its sales target of 410,000 units and this year it aims to sell 380,000 units. The surplus capacity has rendered the facility expansion less urgent for the moment.