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The project proposal of Toyota Motor Corp's new car joint venture in southern China has won approval from the State Council, the nation's cabinet.
"This is just the first step and details for the joint venture are undergoing the approval process of relevant Chinese regulators. We expect to gain the final go ahead soon," said an official from Toyota's representative office in Beijing.
The top carmaker of Japan and China's Guangzhou Automobile Group plan to form a 50-50 joint venture in Guangzhou, capital of Guangdong Province, to produce the Camry sedan, one of the best-selling imported models in China.
The investment size of the expected joint venture has not been revealed.
It was reported that China's First Automotive Works (FAW), the existing joint venture partner of Toyota, attempted to join the project in Guangzhou.
But top executives of the Guangzhou vehicle firm ruled out the possibility of FAW's participation earlier this year.
Toyota and FAW now run two joint ventures and a technical licensing project to produce the Vios and Corolla sedans, Coaster bus and Land Cruiser sport utility vehicle in northern, northeastern and southwestern China.
The two companies also have a sales joint venture in China to market those automobiles.
In February this year, Toyota and the Guangzhou auto firm started to build a US$266-million engine joint venture in Guangzhou.
The joint venture, in which Toyota and Guangzhou Automobile Group have a 70 and 30 percent stake respectively, will produce 2.4-litre engines next year with an annual capacity of 300,000 units - 200,000 for exports and 100,000 for the Camry sedan to be made in China.
The new car venture in Guangzhou is an important move by Toyota to fulfill its target of controlling 10 percent of China's total automobile market by 2010.
The company also aims to have 20 percent of the passenger car segment in China by then.
But Toyota is now lagging far behind rivals - Volkswagen and General Motors - in China's car market.
Last year, Toyota sold 100,000 cars in China, compared with 387,000 units of General Motors and almost 700,000 units of Volkswagen.
China is still the world's fastest-growing car market, despite recent decelerating growth.
Sales of China-made vehicles surged by 34 percent to 4.39 million units last year.
(China Daily July 30,2004)
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