Shanghai Auto Show: Toyota Struggles With Island Issue In China, Tries To Re-Gain Share With Low-Cost Cars

Bertel Schmitt
by Bertel Schmitt
em shanghai auto show em toyota struggles with island issue in china tries to

The booths of Japanese automakers were mobbed today just like those of any other automaker at the Shanghai Motor Show. The action at the showrooms are a different matter. Sales of Japanese cars in China remain problematic more than half a year after rowdy crowds took to the streets last September to torch Japanese cars and showrooms. Sales of Japanese cars in China were down 14.3 percent in March while sales of U.S. carmakers were up 31.1 percent. Sales of German brands rose 24.6 percent.

Toyota does not expect to reach positive territory until August this year, Hiroji Onishi, head of Toyota’s China operations, told a small circle of reporters this morning at the Shanghai show. Asked why August, another Toyota executive quipped: “After previous riots in 2005 and 2010, it took half a year to recover. We figure, this time it might take twice as long.”

Others think it might take longer. The worries that Japanese cars get set on fire or smashed have largely abated in China. However, the image of Japanese has taken a lasting hit. “I don’t want to apologize to my friends for my choice of cars,” an American-educated Chinese executive who works for a European pharmaceutical company told me today in the lobby of my Shanghai hotel. He is in the market for a new car, and cross-shopped the Land Cruiser Prado and the Audi Q5. He now tilts toward the Q5, despite the massive recall of the DSG double-clutch gearbox last March.

Onishi said there are “other issues” that hold his company back from recouping lost market share. Those issues being a lack of new and exciting product. Toyota hopes to get back in the good graces of Chinese buyers with revamped versions of the low-cost Vios sedan and its Yaris hatchback sibling. The approximately $14,500 cars probably aren’t low-cost enough to compete with the $9,000 Chevrolet Sail. Onishi said the Daewoo-platformed car was the only low cost car that so far has made a big splash in China.

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  • Blowfish Blowfish on Apr 21, 2013

    “After previous riots in 2005 and 2010, it took half a year to recover. We figure, this time it might take twice as long.” The problem has not been really dealt with is only shadowed by our man DMZ resides in north of the 38th parallel. Or they're quietly negotiating under the table. None the less the petty bourgeois of middle kingdom has to feel that the issues is really settled to their favour. That is something PM Abe has'nt got the real word of wisdom from Dear Abby yet.

  • PintoFan PintoFan on Apr 21, 2013

    "Onishi said there are “other issues” that hold his company back from recouping lost market share." I.E., making cars that people don't want to buy. Not because they're "Japanese," but because they aren't as good as the competition. How long is Toyota going to bore us with the "nationalism" excuse as a justification for their piss-poor performance in the world's largest car market?

  • Bob65688581 Small by American standards, this car is just right for Europe, and probably China, although I don't really know, there. Upscale small cars don't exist in the US because Americans associate size and luxury, so it will have a tough time in the States... but again Europe is used to such cars. Audi has been making "small, upscale" since forever. As usual, Americans will miss an opportunity. I'll buy one, though!Contrary to your text, the EX30 has nothing whatsoever to do with the XC40 or C40, being built on a dedicated chassis.
  • Tassos Chinese owned Vollvo-Geely must have the best PR department of all automakers. A TINY maker with only 0.5-0.8% market share in the US, it is in the news every day.I have lost count how many different models Volvo has, and it is shocking how FEW of each miserable one it sells in the US market.Approximately, it sells as many units (TOTAL) as is the total number of loser models it offers.
  • ToolGuy Seems pretty reasonable to me. (Sorry)
  • Luke42 When I moved from Virginia to Illinois, the lack of vehicle safety inspections was a big deal to me. I thought it would be a big change.However, nobody drives around in an unsafe car when they have the money to get their car fixed and driving safely.Also, Virginia's inspection regimine only meant that a car was safe to drive one day a year.Having lived with and without automotive safety inspections, my confusion is that they don't really matter that much.What does matter is preventing poverty in your state, and Illinois' generally pro-union political climate does more for automotive safety (by ensuring fair wages for tradespeople) than ticketing poor people for not having enough money to maintain their cars.
  • ToolGuy When you are pulled over for speeding, whether you are given a ticket or not should depend on how attractive you are.Source: My sister 😉