Toyota chief visits China

BEIJING—Akio Toyoda’s visit to
Beijing reflects the importance for Toyota
Motor
Corp. of containing damage to its reputation in China’s huge market,
where the Japanese company was struggling even before its recent recall
problems.

The 53-year-old Toyota president
and grandson of the company’s founder is expected to hold a press conference in
the Chinese capital Monday evening to address quality concerns, the company
said. He also is expected to meet with high-level government officials to
remind them of the company’s commitment to safety and quality, according to
Toyota executives who briefed reporters Sunday night.

“Given China’s strong sense of
rivalry with the U.S., after we explained our situation to American lawmakers
and apologized to U.S. customers last week, there isn’t an option for Mr.
Toyoda and the company to skip China,” one U.S.-based senior Toyota
executive, who is close to the Toyota president, said in a telephone interview
Sunday. According to Toyota, Mr. Toyoda arrived in Beijing Saturday night after
flying to China directly from the U.S.

Toyota’s quality issues haven’t
been as severe in China as in the U.S., where it has recalled millions of cars
over problems with accelerator pedals and other issues. In China, Toyota has
recalled 75,552 RAV4 vehicles, a tiny fraction of the 8.5 million vehicles it
has recalled world-wide.

But Toyota’s overall recalls in
China rose sharply last year—it recalled a total of 989,000 vehicles in China
in 2009, up from the 209,000 in 2008. And China’s quality watchdog warned in a
notice late last week that there could be more Toyota cars in China affected by
the current recalls, pointing to the existence of Toyota cars brought into
China outside its formal distribution channels. A Toyota spokesman said the number
of such cars in China should be “very small.”

Toyota was late to expand in China,
and it has lagged behind global rivals like Volkswagen
AG and General Motors Co. That has hurt the company, as China overtook the U.S.
last year as the world’s biggest car market, with sales surging about 50% to 13
million vehicles, compared with just over 10 million in the U.S.

Toyota fell severely behind the
market last year—its sales grew just 21% in 2009 to 700,900 vehicles—because it
failed to provide cars that matched consumers’ growing appetite for smaller,
more fuel-efficient cars. China’s government has encouraged the purchase of
such cars through incentives and other stimulus measures, a policy the car
maker didn’t anticipate.

The China visit follows a multistop
fence-mending tour in the U.S. last week during which Mr. Toyoda appeared
before a Congressional committee to answer often-angry questions about Toyota’s
quality problems. He also apologized to victims of sudden acceleration
accidents and to customers concerned about the spate of quality problems, and
sought to reassure Toyota’s dealers and workers that the company will regain
its footing. The trip was highly emotional, with Mr. Toyoda occasionally
choking up.

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