Although earlier it was unthinkable for Toyota to sell electric vehicles, its current strategy tops that since it involves selling EVs that are derived from its’s Chinese partner’s vehicle which do not feature is triple-oval logo. This is the extent to which Toyota is willing to go to increase its marketshare in China’s EV market.
In an unprecedented strategic move, Toyota Motor Corp aims to sell its electric vehicles in China without its distinctive triple-oval logo; its vehicles will instead feature GAC Motor’s logo.
GAC Motor is Toyota’s joint venture partner in China and these cars will be built around GAC’s lower-cost technology.
Significantly, the move will provide GAC access to Toyota’s stringent quality control technology, prestige and sales channel.
For Toyota, the move is a quick way to meet Beijing’s requirements that such EVs represent 10% of an auto manufacturer’s production by 2019.
According to sources familiar with the matter at hand, Toyota plans on starting the sale of the GAC Toyota ix4, a battery-powered compact SUV based on GAC’s Trumpchi GS4, by the end of 2018.
The ix4 has been in development for the last two years.
Beijing’s mandates have spurred new alliances, including Ford Motor Co’s with China’s Zotye Automobile Co; the joint venture is currently awaiting regulatory approval from Chinese authorities.
The joint venture aims to design, develop and make several no-frills EVs and sell them through a new China-only brand.
As per Jeff Cai, a Beijing-based senior director at JD Power & Associates, many of GAC’s cars, including the Trumpchi GS8 corssover SUV, already go head-to-head with vehicles marketed by global automakers.
“The GS4 is a good car with acceptable quality,” said Cai. He went on to add, the GS4 ranked No. 1 among Chinese brands and No. 3 among all brands for initial quality in the compact SUV sector.
However, cars coming out of GAC’s stable have longer-term reliability and dependability issues.
Nevertheless, Toyota’s partnership with GAC is indicative of how anxious it is to get a toehold in the Chinese EV market before it launches its own EV in 2020.
“It’s a creative solution to a critical issue all automakers face in China: how to meet the strict production quotas for electric cars,” said James Chao, head of Asia-Pacific at IHS Markit, a Shanghai-based consultancy firm.
Furthermore, Toyota is also negotiating a similar EV deal with a second partner, FAW Group although that has yet to be finalized, said sources familiar with the matter at hand.
Sources declined to provide details of both deals, include production volumes, sales targets and the pricing strategy.
Toyota will assemble the vehicle at a factory in Guangzhou.