Toyota’s China venture dismisses some factory workers as sales fall

The GAC Toyota factory has an annual output capacity of 1 million vehicles and employs around 19,000 people, according to its website. It produces models including Camry, Levin and bZ4X.

Toyota’s move comes after peer Mitsubishi Motors said earlier in July it would cut staff costs at its Chinese joint venture with GAC to try to revive its fortunes.

Mitsubishi Motors CEO Takao Kato told reporters during an earnings call on Monday that the company had not yet agreed with its local counterpart in China exactly how it would pursue the restructuring. The production of Mitsubishi’s new Outlander model remained suspended, Kato added, describing the conditions faced by the company in China as “severe”.

Japanese brands suffered the steepest sales slumps among automakers in China in the first half of this year, with their market share shrinking to 14.9 percent from nearly 20 percent a year ago, according to China Association of Automobile Association. Meanwhile, sales of Chinese brands accounted for 53 percent of the total.

Toyota has been counting on its EVs to revive sales in China, which fell 9 percent in the first six months. The company joined a price war started by Tesla in January and slashed the starting price for its bZ4X EV by 15 percent in February.