Toyota Announces Plan to Construct An Electric Vehicle Factory in Shanghai for Lexus Brand Amid Challenges Faced by Foreign Car Manufacturers in China.
The world's leading automaker made the statement as it revised its forecast for annual net profit upwards to almost $30 billion, in addition to its revenue projection.
Toyota announced its decision to set up a wholly-owned company in Shanghai, China, for the development and production of Lexus battery electric vehicles (BEVs) and batteries.
It is reportedly set to begin manufacturing there after 2027, with plans to create around 1,000 new positions and produce approximately 100,000 vehicles annually.
Japanese business newspaper Nikkei had reported in December that Toyota was planning to construct a new factory in Shanghai.
China surpassed Japan as the world's leading automobile exporter in 2022, thanks in part to its dominance in electric vehicles, a market segment where Japanese companies have suffered from falling behind, prioritizing hybrid vehicles instead.
Weak consumer spending and intense competition is making life challenging for many automobile manufacturers globally.
Toyota's approach to offer a diverse array of vehicles, including hybrid models, has been successful in markets such as the United States.
Toyota announced on Wednesday that it anticipates posting a net profit of 4.52 trillion yen ($29.5 billion) for the current fiscal year, which is higher than its previous forecast of 3.57 trillion yen.
The company also increased its full-year sales forecast to 47 trillion yen from 46 trillion yen.
The "upward revision reflects progress made in increasing earnings power, supported by efforts enhancing product competitiveness", the company stated.
Sales of hybrid electric vehicles increased during the period from April to December, according to Toyota.
Over the same timeframe, in China, total vehicle sales decreased from 1.5 to 1.4 million units.
Honda and Nissan, Japan's second- and third-largest automakers after Toyota, have also initiated discussions on a potential merger to enhance their presence in the electric vehicle and autonomous technology sectors.
Reports this week suggest that talks may be faltering due to Honda's proposal to make its financially-strained counterpart, Nissan, a subsidiary.
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© Agence France-Presse
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