Toyota has dismissed roughly 1,000 contracted factory workers in China as the world’s top-selling automaker adjusts production in a market that’s rapidly transitioning to electric vehicles (EV).
Staff at a joint venture between the Japanese carmaker and Guangzhou Automobile Group were let go before the expiration of their contracts “in light of the current production situation,” a Toyota spokesperson said.
The slower transition to electric vehicles by Toyota, Honda, and Nissan is translating into declining sales in China as car buyers embrace products by competitors such as Tesla and BYD.
Toyota’s China deliveries declined for the first time in a decade in 2022, and the two dozen hybrids and EVs the brand has on sale haven’t been a hit with customers there.
The venture, called Guangzhou Toyota Motor Co., “will also provide the economic compensation required by law,” the spokesperson said.
Koji Sato, Toyota’s president, pledged in April at the Shanghai auto show that the brand would accelerate the development of electric cars tailored to the Chinese market.
Toyota’s cuts follow fellow Japanese automaker Mitsubishi’s decision earlier this month to suspend its China operations after years of sluggish sales.
GAC is the local joint venture partner for both Toyota and Mitsubishi.
Traditional automakers are falling behind
BYD extended its lead over Volkswagen as China’s top-selling automaker, with its wide range of electric vehicles proving hugely popular among local buyers.
After dethroning the German giant for the first time earlier this year, BYD notched up 595,300 sales of plug-in hybrids and fully-electric vehicles in the quarter through June, increasing its market share to 11.2%, according to data from the China Automotive Technology and Research Center.
VW sold 544,000 vehicles in total, of which 23,433 were fully electric, or roughly 4%.
Tesla sold 157,000 of its EVs and ranks 12th. In purely EV sales, Tesla is second in China after BYD.
Volkswagen had been the best-selling brand among automakers in China since at least 2008, when data from the center became available.
The trend reflects the declining influence of legacy foreign brands and gasoline-powered cars, as Chinese EV makers muscle in with increasingly sophisticated and more affordable models.
BYD earlier this year introduced the 73,800 yuan (R183,000) Seagull electric hatchback — the 55-kilowatt motor version offers about 190 miles (306 kilometers) of range.
Global automakers such as VW and Toyota have meanwhile been hampered by their lack of EV offerings.
Sales of new energy vehicles, which include plug-in hybrids and battery EVs, jumped 25% in China in June to 736,000 units, accounting for almost two in every five cars sold, according to Passenger Car Association data.
BYD rose 3.1% in Hong Kong, heading for the biggest gain in three weeks.
Keyword: Toyota prematurely dismisses 1,000 factory workers in China – Blames electric cars