Toyota To Decide On Chinese JV Partner By End-July

TOKYO July 13, 2003 Dow Jones reported that the Toyota Motor Corp. said Monday it aims to select a new partner to produce passenger cars in China by the end of July.

Toyota's president Fujio Cho "hopes to decide by the end of this month" on a Chinese partner, a Toyota spokeswoman said. But she didn't elaborate on the progress made in talks with local automakers.

Guangzhou Automobile Group Co., which already runs a joint venture with Honda Motor Co. (HMC or 7267), is one of the companies Toyota is in talks with. But " no official decision hasn't been made yet" on who to team up with or on details of production, the spokeswoman said.

Toyota, which currently makes Toyota-brand cars in northern China with the FAW Group Corp., said in early July that it is in joint venture negotiations with Guangzhou Automobile and other manufacturers. Toyota hopes the tie-up will help it achieve its target of a 10% share of the mainland China market in 2010.

The joint venture will likely produce medium-size passenger cars. Toyota currently makes a subcompact model in China and plans to launch production of the larger Crown luxury sedan, the compact Corolla model and the Land Cruiser sport utility vehicles by 2005.

The Nihon Keizai Shimbun reported in its Saturday morning edition that Toyota is likely to invest more than Y30 billion to build a plant with Guangzhou Automobile and start production of the medium-sized Camry sedan in 2005.

An alliance with Guangzhou Automobile will put Toyota in head-to-head competition with Honda in the rapidly growing Chinese market. Honda has been enjoying success in China with its medium-sized Accord sedan.