Toyota Motor Corp aims to sell 1.4 million vehicles in China in 2018, nearly 9% more than it sold last year, but two insiders at the Japanese automaker said production constraints and other hurdles make it a tough target to meet.
The sales goal announced by Japan’s biggest automaker on Friday comes at a time when the world’s biggest auto market is experiencing a slowdown in overall vehicle sales growth, Reuters reported.
The two people said the target is more a “stretch goal.” It is a target that is not the baseline sales forecast and one that executives acknowledge will be difficult to achieve, they said. They declined to be identified as they were not authorized to speak to reporters.
A big factor that makes selling 1.4 million vehicles this year more of a challenge is Toyota’s manufacturing capacity which the two individuals said remains strained.
“If we could resolve this capacity issue, it would be easy to make the 1.4 million target. With sufficient capacity, we can possibly sell 1.5 million vehicles,” one of the two people said.
Toyota’s forecast for 2018 is relatively more upbeat than the previous few years in part because it expects to launch a couple of potentially high-volume subcompact sport-utility vehicles later this year, the people said.
They said Toyota plans to launch two China-market versions of the subcompact Toyota CH-R crossover SUV in a June-July time frame. The CH-R hit showrooms in the United States in April last year.
Those two CH-R variants are smallish crossover SUVs that others, most notably Japan’s Honda Motor Co, have leveraged to grow sales significantly in China.
A Toyota spokesman said that though the 2018 sales target was not one that can be easily achieved due to the highly competitive market environment, the recent launch of a redesigned Camry sedan and the planned introduction of two subcompact SUVs later this year would enable Toyota to challenge the previous year’s numbers.
China’s overall vehicle market growth was the weakest last year in at least two decades, increasing just 3% year-on-year to 28.88 million vehicles, pegged back chiefly by a phasing out of tax breaks on smaller-engine cars that begun in 2017.
According to data from the China Association of Automobile Manufacturers, 2018 will be another weak year. It predicts the country’s vehicle market will grow 3.5% in 2018.
Toyota has announced its global vehicle sales in 2017 totaled a record 10.3 million units up 2.1% year-on-year.
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