Toyota is without a doubt one of the biggest automotive manufacturer in the world. Despite that fact, the Japanese carmaker is not doing so well in the soon-to-be largest automotive market, China.
This was confirmed by Bloomberg when it analysed Toyota’s profit in China for the last 5 years. Apparently, the study shared that the FAW-Toyota joint venture is struggling to sell vehicles, thus, leading to cars piling up on lots and showrooms.
It is also understood that about 10% of the dealers will have to throw in the white towel as they struggle to make profits in China. In total, about 95% of showrooms are recording losses at a consistent rate.
Some of the dealers voiced out that things are so bad for FAW-Toyota in China that they are forced to bring up discounts after discounts just so they could at least record some sales. Then again, doing so actually hurt their income more.
FAW-Toyota dealers shared that they require a total sum of 2.2 billion Yuan to pay for costs associated with the extra inventory. Clearly, things are pretty bad in China for Toyota and at this rate; the carmaker might just pull out from the market.