Reports in China suggest that the authorities are likely to reject an application for a joint venture involving Toyota Motor Corporation, as this would make it Toyota's third JV in China.

Toyota possesses 16% stake in Fuji Heavy Industries and has applied with Chery Automobile to make cars.

According to partnership regulations in China, an overseas company is only entitled to two partnerships for passenger cars.

Han Weiqi, an analyst with CSC International Holdings in Shanghai said, "The government is concerned about overcapacity of the auto industry and has been focused on slowing down automakers' expansion pace."

Toyota is currently in passenger-car making partnerships with China FAW Group and Guangzhou Automobile Group in China.