Toyota joins Mitsubishi, Ford in shrinking China workforce as they fall behind in EV race
- GAC Toyota has terminated the jobs of 1,000 employees because of declining sales on the mainland
- The Japanese carmaker’s overall sales in China fell 2.8 per cent year on year in the first six months of the year
Toyota Motor has reportedly laid off 1,000 workers in China, indicating mounting pressure on Japanese carmakers to maintain their market share on the mainland due to their slow transition to electric vehicles (EVs).
Toyota said the decision by its joint venture with Guangzhou Automobile Group (GAC) to terminate the labour contracts was the result of its current production levels, Reuters reported on Monday, citing a statement from the carmaker. GAC Toyota could not be reached for comment on Tuesday.
The move follows job cuts at other international firms such as Ford and Mitsubishi in the world’s largest automotive and EV market where three out of 10 new cars are powered by batteries.
In mid-July, Mitsubishi’s venture with GAC said it would cut staff costs to turn itself around following a sharp drop in sales. Mitsubishi did not say how many employees would be affected. Earlier, in May, Ford was reportedly looking to cut more than 1,300 jobs amid falling sales.
“Japanese carmakers from Toyota to Mitsubishi have lost their market share in China due to Chinese drivers’ [preference] for electric cars,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “Toyota was the least affected Japanese carmaker because its petrol cars are still relatively attractive to many Chinese motorists.”
GAC Toyota delivered 429,662 vehicles, mostly petrol-powered cars, in the first six months of 2023, a decline of 5.2 per cent year on year, according to data from the China Passenger Car Association. It had a 4.5 per cent share of the mainland’s automotive market, down from 4.9 per cent in the same period a year earlier.