Toyota Motor Corp. has decided to postpone construction of a new plant in Tianjin, China, due to sluggish vehicle sales in the wake of anti-Japan protests over the Senkaku Islands dispute, sources said.
The auto giant has also begun considering delaying construction of another new plant, in Guangzhou, the sources said.
The two plants were expected to raise Toyota’s production capacity by 40 percent to 1.3 million units in the world’s largest automobile market, where it is playing catch-up with Germany’s Volkswagen AG and Detroit-based General Motors Co.
The Tianjin plant is the first investment project in China that a major Japanese automaker has been forced to revise amid the fallout of the Senkakus dispute, which sparked anti-Japan protests in major cities in September.
Toyota will set a new construction schedule after examining sales trends in China, the sources said. It saw its sales in China plummet after the protests and estimates it will take at least a year to regain their previous levels.
At the automaker's existing plants in China, output is expected to stay at 70 percent levels of original plans in January and February.
The new Tianjin plant would be Toyota’s fourth in the northern Chinese city, its largest production base in the country.
It was scheduled to be completed around December 2014 and assemble up to 200,000 vehicles a year, mainly small cars.
The plant in Guangzhou, with an annual production capacity of 200,000 vehicles, is expected to be built in 2015. It will be Toyota’s third factory in the southern Chinese city.
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