Toyota to tap China's small car market for growth

Shanghai, September 29 (Gasgoo.com) Toyota Motor, hurt in China by failing to anticipate the demand for affordable small cars, said it will increase the proportion of its smaller cars in the Chinese market for sales growth, the Wall Street Journal reported today, citing a company spokesman.

Chinese consumers have been snapping up smaller cars, especially after the government in January cut sales taxes on cars with engines of 1.6 liters or smaller. However, Toyota, whose product line-up has been focused on larger cars, reported flat China sales in the first half of this year.

Toyota's sales have since picked up, rising 43% in August from a year earlier to 67,000 units, the Japanese carmaker's Beijing-based spokesman Niu Yu said on Tuesday. Sales in the January-August period rose 9% from the same period last year to 415,000 units, he said.

The first-half sales slump has been a blow to the world's biggest automaker as China is the only major global auto market still growing and its major rivals have reported sharp sales gains. The company plans to put more of its small cars to the China market to improve sales.

Meanwhile, Toyota will increase the number of its China dealerships to around 590 by year-end from about 500 in early August. The Lexus, its premium brand, will have 60 dealerships by the end of the year, from 50 in early August.

Toyota Motor said last week that it will launch a new subcompact "family car" in China by 2015. The car will be priced lower than any Toyota cars put on sale so far and will be aimed at first-time car buyers.