Last year, Toyota had to recall more cars from the China market than it had sold the previous year following quality problems at two of its joint ventures, Guangzhou Auto and Tianjin FAW. Last month it had to recall 75,000 RAV4 sports utility vehicles because of the same gas pedal problem that has forced similar recalls around the world and led the company’s president Akio Toyoda to making an apology to the U.S. Congress last week. Tomorrow, Toyoda will be in Beijing to try to repair the damage to Toyota’s reputation in the world’s fastest growing large car market.
The Japanese carmaker hasn’t matched the recent success in China of America’s GM among the foreign manufacturers, largely because it was late into the market and has a limited range of compacts, which has hindered it from capitalizing as much on government tax incentives for small cars. None the less, China is reckoned to be Toyota’s most profitable market now, and the difference between the company moving from being in the black and being in the red last year. As Toyota and the other Japanese carmakers are seen in China as a model for its own emerging carmakers with global ambitions, there is much reason for both sides to hang on Toyoda’s every word.