Toyota, FAW Form Joint Sales Company In China

TOKYO October 28, 2003; Hiroyuki Kachi writing for Dow Jones reported that Toyota Motor Corp. said Tuesday it has formed an automobile sales company in Beijing jointly with China's FAW Group Corp., in a bid to meet diversified consumer demand in the vast Chinese market.

The new joint venture, called FAW Toyota Motor Sales Co., will start operations Nov. 1. It will have 68 dealers across China then. The JV will operate five branch offices, in Tianjin, Changchun, Chengdu, Shanghai and Guangzhou.

Toyota is already in a partnership with FAW Group Corp. to jointly produce four Toyota models, including the "Crown" luxury sedan and the "Land Cruiser" sports utility vehicle.

Through the tie-up with FAW, China's biggest auto maker, Toyota hopes to eventually obtain a 10% market share in China by 2010.

The new car sales joint venture is capitalized at $25 million. FAW holds a 36% stake in it, and Toyota 32%. The remaining shares are held by Toyota's and FAW's regional companies in China.

The venture will handle sales and after-sales service for Toyota and Daihatsu Motor Co. brand vehicles and parts produced in China.

In addition to the "Coaster" midsize bus and "Vios" small passenger car that both Toyota and FAW are making and marketing in China, the newly launched venture will also sell the "Crown," "Land Cruiser" and "Land Cruiser Prado," and the "Corolla" small passenger car.

The joint venture will also sell Daihatsu's "Terios" compact sports utility vehicle, which is part of the "Dario" series it developed specifically for the Chinese market.

Toyota has a 51.1% stake in Daihatsu.