Toyota witnesses strong growth in China in 2021 owing to accessible supply chain, finds GlobalData

Following the news that Japan’s Toyota Motors dethrones other Japanese automakers in 2021 vehicle sales in China;

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:

“Toyota’s new vehicle sales in China reaching a record high of 1.94 million units, up 8.2% from 2020, is attributed to the company’s robust supply chain that weathered away the headwinds caused by the global chip shortages. Access to chip led to limited production cuts for Toyota that helped the company to be a frontrunner in key markets such as US and China in 2021. Toyota surpassed GM in the US in terms of sales breaking the 90-year sales streak. High uptake of hybrid vehicles and new ‘models line-up’ have also acted in favor of the company in China. Hybrid sales stood at 16% up from the previous year to 233,801 units.

“China’s new vehicles sales in expected to total 26.1 million units in 2021 as per China Association of Automobile Manufacturer, which is 3.1% up from the previous year. Toyota has been on a growth spree in China for the past nine years and managed to grow above the industry average. However, on the flipside, most foreign and Japanese automakers continued to face the market headwinds. This showcases how steadily Toyota has been penetrating the Chinese market with right product and marketing mix and its products receiving a wide customer acceptance. Toyota has now surpassed Honda to be second top selling brand in China after Volkswagen.

“Toyota’s business strategy which is quite adaptable to local market should come out as a use-case for other foreign automakers. The company has been seen using a balanced approach on next-gen technologies such as electric, autonomous, hydrogen and well as the traditional gasoline/diesel vehicles, giving it an upper hand in its target markets. The company is expected to continue this growth trajectory in 2022 as the Chinese market would witness ease in chip supply and a strong recovery from the COVID-19 and the economic crisis.”