Toyota is one of the biggest automotive companies in the world but it seems that the Japanese carmaker is not doing so well in China. This is worrying as most other carmakers have been recording profits in the great east nation.
The FAW-Toyota joint venture was reported by business analyst that sales of Toyota vehicles are really slow in China and this is forcing many dealers to throw in the white towel. At the moment, as many as 10% of Toyota dealers is in the verge of closing down.
Another study revealed that as much as 95% of the showrooms are losing so much money. The problem here is understood to be with the poor balance in stock and demand. There are too many Toyota vehicles in the showroom but little demand for it.
As such, cars are often offered with a massive discount just to see them go away. Then again, consistent discounts have resulted in a huge loss for dealers and also failure in hitting the annual income target.
At this rate, things are not looking great for Toyota and FAW. Both firms will have to regroup and rethink of a new business strategy that can aid dealers in overcoming their sales hardship.
