China’s Strikes: A Foreign Affair

This Bystander will be convinced that the supposed groundswell of factory workers’ discontent with their pay and conditions is a significant force once the strikes we have seen in recent weeks that have hit car production at Honda and now Toyota plants spread beyond foreign-owned factories to domestically-owned ones. One of the purposes of the news blackout on these strikes is to forestall that happening through copycatting. There is no sign that the authorities will tolerate widespread illegal industrial action or the circumvention of government-sanctioned unions at Chinese-owned factories.

Akio Toyoda’s Damage Repair

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.

Toyota Car Recall A Big Embarrassment

Oops. Toyota is recalling 690,000 cars made at two of its joint ventures, Guangzhou Auto and Tianjin FAW because of faulty electrical window switches.  That is more cars than it sold in China last year. Though not a safety threatening defect, the recall is big, and an embarrassment. Not only is it the biggest autos recall in China since 2004, it also highlights Toyota quality/reliability/durability standards and follows a recall of Camry’s earlier this year because of faulty brakes. Models affected by this latest recall include Camry, Corolla, Vios and Yaris.

The recall won’t do much for Toyota’s idling sales in China, either; the Japanese carmaker hasn’t matched the recent success of America’s GM among the foreign manufacturers, largely because it has a limited range of compacts, and so hasn’t been able to capitalize as much on government tax incentives for small cars.