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Analysis: Toyota Experiencing Manufacturing Crisis in China

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Feb. 14, 2018—Toyota, the world’s biggest car manufacturer, is experiencing misfires in China, as it lacks both the models and the manufacturing capacity, according to a recent Bloomberg article.

Since 2015, sales have lagged for Toyota in China, while rival OEMs have made inroads. Toyota is currently barely among the top 10 manufacturers with regard to units sold in that major Asian market.

Toyota hasn’t taken advantage of the strong Asian market for the subcompact SUV, noted. And, Toyota also has the aforementioned shortage of manufacturing capacity; a company target of selling 1.4 million cars in China during 2018 will be tough to achieve without upgrading production lines, Reuters recently reported, citing company insiders.

Even with a stronger year in 2018, Toyota will almost certainly find itself trailing Volkswagen, Honda, Geely, and General Motors in China with regard to sales. However, financial results released earlier in 2018 showed that Toyota generated operating income of 673.6 billion yen ($6.2 billion) for the third quarter, which beat estimates.

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