China Daily reported that Toyota has denied media reports that it will withdraw from the Chinese market and shut down production facilities in the country, but said that necessary adjustments will be made in some of its JVs Toyota Motor (China) Investment Co Limited.

According to some Japanese media, such as the Japanese Economic News, Toyota planned to suspend operations in some factories in China because Japanese branded cars are being hit by weak demand and sharp sales declines amid tensions between China and Japan over the Diaoyu Islands.

Japanese media also reported that Toyota is considering cutting this year's output target by 2%, because of the sharp decline in sales in the Chinese market.

However, a Toyota spokesman denied the report. He said that "So far, we haven't changed the previously published data."

A director from Toyota Motor in China told the Beijing News that Toyota sales were affected due to the Sino Japanese tensions. He added that "Some stores are getting fewer customers, and the number of orders is beginning to slide. All the Toyota plants in China are cooperation projects between China and Japan, and its products are sold in China, so the production adjustment must be negotiated by the two sides."

According to the China Auto Industry Policy, in a car assembly JV, foreign funds cannot account for more than 50%.

Toyota's previous announcement of limiting production may be extended to November 2012, which means that its 1 million cars sales target will not be achieved this year. The Chinese market accounts for 12% of Toyota's global sales.

Source – China Daily

(www.steelguru.com)