Toyota Motor Corporation is set to establish its first wholly-owned electric vehicle manufacturing facility in China. The Japanese automotive giant plans to focus on Lexus production at the new Shanghai plant, marking a departure from its traditional joint venture approach in the world’s largest automotive market.
The Shanghai facility, slated to begin operations around 2027, represents Toyota’s commitment to expanding its electric vehicle footprint in China. This development positions Toyota as the first Japanese automaker to independently operate a manufacturing plant in the region, stepping away from its long-standing partnerships with FAW and GAC.
While other Japanese automakers struggle to maintain their position in China’s competitive landscape, Toyota has demonstrated remarkable resilience. The company’s 2023 performance showed only a modest 2% decline in sales, while competitors like Honda and Nissan experienced steeper drops exceeding 10%. Notably, the Lexus brand achieved a 3% growth during this period, bucking the downward trend.
The decision to establish a solely-owned facility reflects Toyota’s adaptation to changing market demands and regulatory requirements. Currently, Toyota’s Chinese operations produce approximately 1.75 million vehicles annually through joint ventures, with most Lexus models being imported from Japan. This new factory will streamline the production process and reduce dependency on imports.
Lexus’s ambitious electrification goals align perfectly with this expansion. The luxury brand aims to convert its entire global lineup to electric vehicles by 2035, targeting annual EV sales of 1 million units by 2030. The Shanghai facility will play a crucial role in achieving these objectives, particularly in serving the growing Chinese market for premium electric vehicles.
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