Toyota-GAC Joint Venture Lays Off 1,000 Workers In China

Toyota's lagging EV efforts are partly to blame.

Toyota bz3 and bz4x

Suvrat Kothari

By: Suvrat Kothari

Jul 25, 2023 at 1:05pm ET

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Toyota is facing severe challenges in China. A recent report states that the Japanese automaker prematurely terminated the contracts for 1,000 workers in the world’s largest car market.

The brand’s joint venture in China, with state-owned Guangzhou Automobile Group (GAC), laid off workers over the weekend and offered them compensation, according to Reuters.

The publication spoke to three workers who shared information on conditions of anonymity. They were hired by labor service companies, and dispatched to a factory in the southeastern city of Guangzhou.

The GAC-Toyota factory reportedly employs around 19,000 workers and has an annual production capacity of one million vehicles, including models like the Camry, Levin (a renamed Corolla), and the all-electric bZ4X SUV.

Japanese automakers, including Toyota and Honda, have been among the laggards when it comes to electric vehicle adoption. Toyota could lose between one to three percent market share in China this year.

Gallery: 2023 Toyota bZ4X in US specification

2023 Toyota bZ4X XLE FWD in Wind Chill Pearl paint and 2023 Toyota bZ4X Limited AWD in Heavy Metal paint

2023 Toyota bZ4X XLE FWD in Wind Chill Pearl paint front three-quarter view

There’s also the Tesla-triggered price war which could be hurting Toyota. To boost sales, Toyota reduced the price of the bZ4X in China by about $4,000, with the SUV starting at 169,800 yuan ($24,660). The bZ3 starts at a similar price.

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That said, Toyota has reiterated its focus on zero-emissions vehicles. The brand will launch 10 new electric models by the end of 2026, with a target of producing 1.5 million BEVs by the same timeframe.

It will also debut a new battery technology in a next-generation electric Lexus model, with a claimed range of 900 miles. The carmaker also claims to have achieved a breakthrough in solid-state batteries.

Source: Reuters

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