Toyota - Made In China?

TOKYO, July 2, 2003; Reuters reported that Toyota Motor Corp, Japan's top automaker, is in talks to tie up with China's Guangzhou Automobile Group to produce passenger cars in the southern Chinese city of Guangzhou, Japanese media reported on Wednesday.

Various media, including the Tokyo Shimbun daily and the Kyodo News agency, said the two automakers were finalising an agreement to form a joint venture and begin producing the Camry sedan at a new plant starting in 2005 at the earliest.

"We are talking with various car makers around the world, including Guangzhou Automobile, on these possibilities, but nothing has been decided," a Toyota spokesman said, adding an announcement was unlikely in the immediate future.

A Toyota spokeswoman had said earlier that the company was not in talks with the Chinese firm.

No one at Guangzhou Auto was immediately available for comment.

Toyota already has an alliance with China's First Automotive Works (FAW) and plans to make 300,000 to 400,000 compacts, luxury sedans and sports utility vehicles annually in China by 2010. Guangzhou, meanwhile, has a joint venture with Honda Motor Co, Japan's second-ranked automaker.

Faced with sluggish growth at home, Japanese automakers have been scrambling to gain a foothold in the rapidly expanding Chinese auto market, where sales rose by over 50 percent in 2002.

Toyota is a relative latecomer to the Chinese market, where Volkswagen AG (XETRA:VOWG.DE - News), General Motors Corp and Honda have been making cars for years.

The Tokyo Shimbun, citing unspecified sources, said the Toyota-Guangzhou venture would start with annual production of 30,000 to 50,000 units with a view to eventually expanding capacity to 300,000.

Guangzhou Automobile, owned by Hong Kong's Denway Motors Ltd (HKSE:0203.HK - News), set up a joint venture with Honda in 1998, known as Guangzhou Honda Automotive Co Ltd, to produce the Accord sedan.