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ECONOMY

Toyota and Honda to ramp up China plants to make up lost output

  • April 30, 2020
  • , Nikkei Asian Review , 9:48 p.m.
  • English Press

TOKYO — Japanese auto companies will accelerate production in China from May as the country recovers from the coronavirus pandemic earlier than other parts of the world.

 

The carmakers are moving to pump up output to position themselves as they see the massive market re-emerging as the global sales leader.

 

Toyota Motor and Honda Motor will each increase manufacturing by 10% in May from the same month last year in a bid to make up for production losses earlier this year. Nissan Motor will also increase production but to a level that is still 20% lower than during May of 2019. The companies were urged to suspend all production until mid-February as the pandemic raged.

 

Toyota, which has four assembly plants in China, produced around 1.4 million vehicles there in 2019, accounting for a little less than 20% of its global production. Sales in China posted a 70% reduction in February, but are expected to have recovered in April to grow more than the same month last year.

 

“Demand for vehicles is surging as Chinese consumers prioritize safety,” said a Toyota executive. “The recovery is quite astonishing.”

 

Honda, which has seven plants in Wuhan and Guangzhou, will also boost monthly production by 10% to 140,000 vehicles in May. The company was urged to slash output by a total of 170,000 vehicles in February and March.

 

Nissan suspended work at all four of its factories from the end of January to mid-February. But it will eventually restore production to 80% of what it produced in 2019.

 

German automakers are also seeing recovery in China. Britain-based research firm LMC Automotive said that unit sales at Daimler and BMW recovered to a level only 7% and 13% lower, respectively, than their levels at the same time in 2019. Volkswagen, which announced its sales were 36% lower in March, reopened all dealerships in April.

 

Japanese car companies halted their production starting from the end of January. They gradually resumed operations from mid-February, but their sales were still down from 70% to 80% then. Toyota took the lead in reopening all of its plants in late February, recovering to a level 16% lower in March than the year before.

 

According to a local trade union, China’s unit sales for the period between April 1 to April 25 have rebounded to last year’s level, indicating a solid market recovery.

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