Following recalls, Toyota plans new R&D center

0 CommentsPrint E-mail China Daily, August 16, 2010
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Toyota will build its first wholly owned R&D center in China.

Toyota will build its first wholly owned R&D center in China.

A Toyota executive has confirmed the Japanese automaker will build its first wholly owned R&D center to bolster vehicle quality in China.

Masahiro Kata, president of Toyota's China operation, made the remarks during a recent quality seminar in Japan.

Reports late last year said Toyota was planning a $330 million to $440 million R&D facility in China, but no further progress has since been announced.

No details have been released by Toyota's China operation, but Kata said previously the center is awaiting approval from the Chinese government and will be located on the outskirts of Shanghai.

Its joint venture FAW Toyota Motor Sales Co opened an R&D center in Tianjin in July 5, but the world's largest carmaker has yet to itself build one in China.

Other global automakers including General Motors and Volkswagen already have R&D centers in the country.

The new Toyota Tianjin center also lags behind the magnitude of other joint venture R&D operations such as GM's Pan Asia Technical Automotive Center, now the biggest in China.

Recall aftermath

Increased emphasis on R&D comes after Toyota recalled 8 million vehicles worldwide for potential safety problems, including 700,000 vehicles in China since last August from its Camry, RAV4 and Lexus lineup.

JP Morgan Securities estimates Toyota's global recall cost the carmaker $3.7 billion.

In response, the auto giant established a new chief quality officer position in March and started an operation known as the China Quality Special Committee in April to bolster quality controls in China.

According to Liu Peng, chief of public relations for Toyota's China operation, the parent corporation has established operations in China to listen to customers and improve quality.

Local media are reporting the Japanese auto giant delivered more than 360,000 vehicles in China in the first half of this year, a 27 percent increase over a year ago despite bad publicity over the recall crisis.

But despite the increase, sales of foreign brands in China continues to be dominated by German and US joint ventures.

According to China Association of Automobile Manufacturers, FAW Toyota Motor Co ranks 10th in passenger cars and has just 6 percent of the market. Shanghai General Motor Co has a 15 percent share.

Hattori Etsuo, chief company representative at FAW Toyota, predicted a few years ago that the brand would have 10 percent of the Chinese market, but that goal is not likely to be achieved in 2010.

Instead, the carmaker is now publicly emphasizing quality.

"Not only in China, but also in the world, Toyota does not pursue size or quantity, but quality and service that can satisfy our customers," Hattori said in an interview with

"Toyota will have no prospect if it fails to achieve sound development in China," he said.

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