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The Honolulu Advertiser
Posted on: Saturday, May 20, 2006

Toyota hopes to conquer China with Camry

By Elaine Kurtenbach
Associated Press

Despite models driving futuristic concept vehicles at auto shows and other promotional efforts, Toyota hasn't made a big dent in the fast-growing China market, where General Motors and Volkswagen rule.

Associated Press library photo

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SHANGHAI, China Toyota, on course to overtake General Motors as the world's biggest automaker, is well behind in the world's fastest-growing market and one where GM is thriving: China.

But next week, Toyota hopes to take a key step toward catching up when it rolls out its first made-in-China Camry, the best-selling model in the United States.

The launch, from Toyota's new $475 million factory in Nansha, near the southern city of Guangzhou, symbolizes the automaker's newfound ambitions for China, which is about to surpass Japan as the world's second-largest auto market.

Virtually unscathed by political friction that erupted into anti-Japanese riots last year, Toyota and fellow Japanese automakers Honda Motor Co. and Nissan Motor Co. are pushing ahead with billions of dollars in new investments.

Toyota Motor Corp., a relative latecomer to China, has a paltry 3.5 percent of the market, with 179,000 vehicles sold last year.

That puts it well behind top foreign automaker General Motors Corp., which captured 11 percent of the market last year with 665,390 units sold, and Volkswagen AG of Germany, the No. 2 foreign maker.

Until recently, Toyota's cars were viewed as pricey imports. But the company's reputation for reliable, fuel-efficient cars is boosting its appeal among economy-conscious families, who are more sensitive to fuel prices than the government and corporate buyers who once dominated the market. The company's sales surged 55 percent last year.

The Camry was the lead import model in China over the last 10 years, selling 20,000 to 30,000 annually during that time, according to Yale Zhang, an auto market specialist for consulting firm CSM Asia Corp. in Shanghai. By shifting production to China, where consumers are closer, Toyota hopes to double its Camry sales to 60,000 by year end.

Toyota is betting that as in the United States the reliable, mid-sized sedan will spearhead its growth in China, helping it reach 1 million units in sales, or a projected 10 percent of the market, by 2010.

"We are confident that the Camry is a good fit for the Chinese market," Toyota Motor Corp. president Katsuaki Watanabe told The Associated Press this week at a Tokyo reception for auto executives.

GM spokesman Dee Allen said the company is aware of Toyota's plans in China and sees the Japanese company as a tough competitor in any market.

"But we have a multibrand strategy in China with Wuling, Chevrolet, Buick, Cadillac and Saab and our business results there have been very good. We've seen double-digit growth and we continue to expand," Allen said yesterday.

"I don't know that this is so much a case of GM defending its position as it is one of Toyota establishing one," he said.