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Toyota Motor said it would extend its production cuts in China by three months to reduce inventory pressure on dealers.

The automaker had previously notified dealers production at its Tianjin joint venture with state owned FAW Group would be reduced in October and November due to rising competition mainly from domestic automakers such as BYD, Geely and also Tesla.

Most major auto brands in China have slashed prices over the last year due to overcapacity, with a large number of local manufacturers also said to be struggling under pressure from intensifying competition.

Other Japanese brands including Honda and Nissan also have had to cut output in China and have stepped up their battery electric vehicle (BEV) production and export plans under rising competitive pressure, while Mitsubishi announced in September it would exit its local joint venture with Guangzhou Automobile Group (GAC).

Toyota earlier this year also cut production and laid off around 1,000 workers at its other main Chinese joint venture, with Guangzhou Automobile Group, which makes the bZ4X.

According to local reports, FAW Toyota told dealers production cuts would be extended until the end of February 2024 to ensure its dealers could continue to operate well in the current “severe market environment”.

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By GlobalData

In a letter to dealers, the joint venture said “production from December until February of next year will continue to be reduced by a large amount”, adding the measures would reduce output to 66,000 units in December, 60,000 units in January and 38,000 units in February”.

Toyota is struggling to keep up with competition in the country’s fast growing battery electric vehicle (BEV) segment with its FAW Toyota joint venture producing just the CHR-based Izao BEV while also making the RAV4 and Corolla plug-in hybrids as well as a wide range of internal combustion engine (ICE) models.

Toyota and its joint ventures sold 1.38m vehicles in China in the first nine months of the year, down by an estimated 9% year on year.