Toyota Says Orders for Chinese-Made Car Top Expectations

TOKYO December 19, 2002; Toyota Motor Corp. president Fujio Cho said Thursday the world's third-largest car maker will likely need to increase production capacity for its first-ever China-made Toyota-brand passenger car after receiving stronger-than- expected orders.

Mr. Cho said orders for its "VIOS" subcompact car, which went on sale across China in early October, have already totaled over 10,000 units. The auto maker had expected to receive orders for 5,000 units by the end of the year.

Tianjin Toyota Motor Co., a 50-50 joint venture between the Japanese auto giant and Tianjin FAW Xiali Corp., launched production of the VIOS with annual capacity of 30,000 units in October.

"As (sales) volumes are likely to increase ... we will slightly increase" capacity, Mr. Cho said.

Mr. Cho added Toyota aims to increase capacity by utilizing existing output lines. He said there are no plans to set up new lines or build a new plant.

In October, Toyota Motor targeted annual sales of 30,000 units of the VIOS.

Mr. Cho was speaking at the company's year-end press conference.

Meanwhile, Toyota executive vice president Ryuji Araki said the Toyota group aims to make a quick decision on whether or not it will provide financial support to midsize trading house Tomen Corp.

Mr. Araki's comments came after the Yomiuri Shimbun reported Tuesday the auto giant was in the final stages of negotiations aimed at bringing the trading house into the Toyota group.

Mr. Cho said he heard that affiliate Toyota Tsusho Corp. is waiting for Tomen to present clearer restructuring plans.

He also reiterated that Toyota hasn't received a formal request from UFJ Holdings Inc. for financial support. Mr. Cho was commenting on recent media reports that Toyota is planning to provide support to the megabank.

Toyota executive vice president Akihiko Saito said Toyota and Nissan Motor Co. (NSANY) are still working on details of their agreement to jointly develop gasoline-electric hybrid systems. The deal will see Toyota supply hybrid car systems to Nissan for at least 10 years.

Mr. Saito said his company won't hesitate to use technologies owned by Nissan under the agreement.

He also said Toyota will likely test fuel cell-powered vehicles next year with other companies, such as gas and energy-related companies.

His comments come after an announcement earlier in the week that General Motors Corp. will test a fuel cell-powered vehicle in Japan next June in collaboration with FedEx Corp.