Toyota, Guangzhou auto firm launches engine JV plant
Top Japanese automaker Toyota Motor Corp on February 25 started to build a huge engine joint venture plant with Guangzhou Automobile Group.
The two parent firms revealed in a statement that the joint venture, Guangzhou Toyota Engine Co Ltd, has total assets of 2.2 billion yuan (US$265.7 million) and a registered capital of 1.1 billion yuan (US$132.8 million).
Toyota and the Guangzhou auto firm control 70 and 30 per cent stakes in the joint venture, which will start to produce 2.4-litre engines next year.
The venture's annual production capacity will initially be 300,000 engines, of which 200,000 engines will be for export and the remainder will be for Toyota's Camry sedan, which will also be made in Guangzhou with the Guangzhou Automobile Group.
Toyota and the Guangzhou auto firm will form a new joint venture to produce the Camry, a model which is very popular in China.
"We are waiting the central government's approval for the joint venture," said Zhang Fangyou, chairman of the Guangzhou auto firm.
The expected Camry project will give Toyota a new strong foothold in China, the world's fastest-growing auto market. Toyota aims to have a 10 per cent share of China's auto market by 2010.
The Japanese company began producing the 1.8-litre Corolla on February 23 at a joint venture in North China's Tianjin Municipality with First Automotive Works Corp (FAW), China's biggest vehicle manufacturer. The Corolla is the firm's global best-seller, and the joint venture is also producing the Vios compact sedan.
Toyota is producing the Land Cruiser and Prado sport utility vehicles and Coaster bus at two joint ventures in Northeast China's Jilin Province and southwestern Sichuan Province with FAW.
Officials from the Guangdong provincial government said Toyota's engine and sedan joint ventures will significantly enhance the local auto industry's strength.
Another two Japanese automakers, Honda and Nissan, have also set up car joint venture plants in Guangzhou.
Honda is producing the Accord mid-sized sedan, Fit compact sedan and Odyssey commercial wagon in a joint venture with Guangzhou Automobile Group.
Nissan is making the Bluebird and Sunny sedans in a joint venture with Dongfeng Motor Corp.
All the three major motor makers of Japan, Hondar, Toyota, and Nissan, chose Guangzhou to be their manufacturing base in China.
"Guangzhou's advanced motor industry, which ranks the third in the country, following Shanghai and Jilin, is expected to promote the city's sustainable economy," city Party Secretary Lin Shushen said at the ceremony.