Toyota Motor Corp., China wasn¡¯t always the first pit stop when it came to
unveiling key car models. But this time, it¡¯s different.
Japanese automaker is set to take the wraps off the all-new Corolla -- and its
China-only twin, the Levin -- at a global premiere in Guangzhou on Friday, hours
before it¡¯s put on display in California. The move marks Toyota¡¯s deeper push
into the world¡¯s biggest auto market where it is trailing rivals.
Corolla, the staid workhorse that seldom makes heads turn but still loved
universally, is getting a facelift at a time when sedans are losing their sheen in
the U.S. while gaining followers in China. Built on Toyota¡¯s new global
architecture platform, the models to be unveiled will offer more connectivity
and intelligent features to lure Chinese buyers.
overtook the U.S. to become the largest market for the compact sedan last year,
with the combined annual deliveries of Corolla and Levin reaching half a
million and taking the lead in the segment. Amid a sharp consumer shift to SUVs
and crossovers in the U.S., Toyota is increasingly counting on China to sustain the success
story of the world¡¯s best-selling model of any carmaker over the last thirty
about 40 percent of Toyota¡¯s China sales, the models are key to changing the
automaker¡¯s also-run status. Toyota sold 1.29 million vehicles in China last
year and is targeting 1.4 million this year, compared with sales of more than 4
million units each at Volkswagen AG and General Motors Co. Japanese competitors
Nissan Motor Co. and Honda Motor Co., though smaller globally, have also been
quicker than Toyota in ramping up sales in China.
believes it has potential to raise its market share given it is low compared
with the U.S.,¡± said Janet Lewis, an analyst at Macquarie Capital Securities in
Tokyo. ¡°The Corolla is a less important product for the U.S. market than for
China in light of declining sedan volumes. Products tend to be tailored for the
biggest markets ¨C in this case it is the Corolla and Levin for China.¡±
to reversing that laggard status is the ever-reliable Corolla, a car so reputed
for its quality that many owners prefer another Toyota for their next purchase.
has traditionally been concentrating on the U.S., even after China overtook it
to become the world¡¯s largest car market in 2009. Now though, the famously
cautious Japanese manufacturing giant has added incentive to shift focus as
China moves to loosen restrictions while the U.S. threatens to raise trade
of now Toyota has been largely unscathed, or even has actually benefited from
the U.S.-China trade war. While China in July increased the levy on vehicles
imported from the U.S. to 40 percent, it almost simultaneously lowered the duty
on other imported cars to 15 percent. That has in particular benefited Toyota¡¯s
luxury Lexus vehicles exported from Japan to China.
coupled with continued strong demand for the outgoing Corolla and the new
Camry, helped Toyota boost China sales by 13 percent in the first nine months
this year, bucking an industry slowdown and leading the gains by major
carmakers. This also has boosted confidence for Toyota to set its eye on
tripling car production in China by as soon as 2030.
be sure, Toyota¡¯s future growth hinges on how the company embraces new-energy
vehicles. Under China¡¯s so-called cap-and-trade policy, automakers must obtain
a new-energy vehicle score -- which is linked to the production of various
types of zero- and low-emission vehicles -- starting January.
which has been a laggard in electric vehicles, had to speed up in NEVs. Unlike
VW or GM, the conventional hybrids with which Toyota is the indisputable leader
will be central to the company¡¯s electrification efforts. Toyota intentionally
put two gasoline-electric versions of the Corolla and Levin on display in
Guangzhou, as sales of hybrid models have started to take off since it
localized production in 2015.
conventional hybrids are unlikely to be included as NEVs in China and it
remains to be seen how far they can go without much government support that EVs
and plug-ins receive. To find allies promoting the technology, Toyota has
engaged in advanced talks to license its hybrid system to Chinese carmaker
Geely Automobile Holdings, Bloomberg has reported.
are very important to Toyota¡¯s China and global strategy, but it only works in
China if other companies produce them,¡± Lewis said.