Toyota reports 17% decline in China Q1 sales

Japanese automaker Toyota Motor Corp said its China sales in the first quarter of 2009 declined 17% year on year to 125,743 units while major rivals like General Motors Corp and Nissan Motor Co posted robust growth in quarterly sales in the world's largest auto market, the Wall Street Journal reported on Wednesday.

The paper said the reason for the decrease in Toyota's quarterly sales in China is that the automaker did not respond quickly to the increasing demand for low-emission cars in small cities and rural areas. The company said it did not anticipate the increase in demand for small cars or that the overall market would recover so fast.

Sales of Toyota cars equipped with engines of 1.6 liter or below only accounted for 25% of Toyota's passenger car sales in China.

To boost the domestic auto market, the Chinese government earlier this year issued stimulus measures that include tax-cuts for purchases of low-emission cars and subsidies for car purchases by rural residents.

In April, China's vehicle sales hit a record high of 1.15 million units on the increasing demand for small cars and crossover vehicles, according to figures released by the China Association of Automobile Manufacturers (CAAM).

In order to catch up in the Chinese market, Toyota plans to boost its output of 1.6-liter engines for the Corolla lineup by 65% at its Tianjin plant in China, said the paper, citing people close to the matter as saying.