Toyota's president to visit China on Monday
TOKYO: Fresh from a grilling by U.S. lawmakers, Toyota President Akio Toyoda will speak Monday in China about his company's quality problems, seeking to boost confidence and ease consumer worries in the world's biggest auto market.
Toyoda, who testified at a U.S. Congressional hearing last week about the spate of global recalls plaguing Toyota Motor Corp., will speak to reporters at a Beijing hotel, company spokeswoman Ririko Takeuchi said.
The number of vehicles being recalled in China is small compared with the 8.5 million vehicles recalled worldwide since October for sticky gas pedals, faulty floor mats and glitches in braking software.
But Toyota has ambitious plans for growth in China, where it and its global rivals are finding growth that was stagnating even before the recall crisis in traditional American and European markets.
The flood of recalls in the United States has shaken confidence in Toyota's reputation for top-grade quality. In China, the company announced a recall of 75,552 RAV4 sport-utility vehicles in late January due to the gas pedal problem.
Toyota has said its plans to expand in the Chinese market are unchanged, with its sales in the country expected to rise to 800,000 vehicles this year, up from 709,000 in 2009.
China's overall vehicle sales soared 45 percent last year to 13.6 million, overtaking the U.S. as the world's biggest auto market.
After answering questions by lawmakers last week, Toyoda visited with dealers and went to Toyota's largest North American assembly plant in Kentucky. He is not scheduled to appear at a Toyota hearing Tuesday by a U.S. Senate committee.
Toyoda, grandson of the company's founder, has made no public appearances in Japan since speaking in Washington, although media reports say he has returned. Toyota's policy is to never comment on the whereabouts of its top executives, saying such details are confidential.
Toyoda's haste in moving on to China, despite the limited number of recalls there, appears to reflect the company's eagerness to restore the reputation for high quality that is its key advantage there.
So far, China's state-controled media have made only muted comment on the recalls issue. The problem is mainly viewed as a precautionary example of potential pitfalls for China's nascent domestic car industry.
"It is a wake-up call (for the Chinese). This is not easy, this is a major challenge to get the product right and keep customers satisfied," said John Bonnell, a J.D. Power analyst in Bangkok.
Toyota got a relatively late start in China, after fitful efforts to break into the market early on in tie-ups between its subsidiary Daihatsu Motor Co. and a state-run automaker, Tianjin Automobile Industry Holding Co.
Only in May 2006 did Toyota roll out its first made-in-China Camry, in a partnership with Guangzhou Automobile Group, based in the affluent southern Chinese market near Hong Kong. Toyota also has a partnership with FAW Group, another state-owned automaker based in northern China.
"There is no question but that the Chinese market will overtake the Japanese market," Yoshimi Inaba, now Toyota's top North American executive, declared as the Guangzhou factory opened.
Since then, thanks partly to hard times brought on by the global financial crisis, China has overtaken both Japan and the U.S. to become the No. 1 market.
While the Camry proved a big success in China as elsewhere, both global rivals and Chinese upstarts have also been gaining ground — maneuvering to capture the small car market that Toyota has eschewed in favor of bigger, more expensive sedans.
For all the automakers, China and other fast-growing emerging markets are providing growth and profits to offset losses in their traditional market.
"If it wasn't for China last year, a lot of the makers, Toyota, Nissan, Honda, would be staying in the red. China is probably their most profitable operation," said Christopher Richter, an auto analyst with CLSA Asia Pacific Markets in Tokyo.
In any market, though, Toyota is facing an uphill struggle to mollify both consumers and regulators.
In Japan, Toyota has recalled 223,000 vehicles for hybrid models, including the Prius, for braking problems. But the company has a major stake in its home market and as the world's biggest automaker, is viewed as a role model not just for automakers but for Japan as a whole.
Japanese Transport Minister Seiji Maehara, appearing at a nationwide broadcast news show Sunday, complained that Toyota's "corporate culture" reflected a reluctance to be forthright on recalls.
"The company is not taking the problem as seriously as it should," he said, saying the company's quality chief, Shinichi Sasaki, came to explain the problems to the ministry only after being asked to do so.
Associated Press writer Elaine Kurtenbach in Shanghai contributed to this report.