BEIJING -- Toyota Motor Corp. aims to sell 1.4 million vehicles in China in 2018, nearly 9 percent more than it sold last year, but two insiders at the Japanese automaker said production constraints and other hurdles make it a tough target to meet.
The sales goal announced by Japan's biggest automaker on Friday comes at a time when the world's biggest auto market is experiencing a slowdown in overall growth.
The two people said the target is more a "stretch goal." It is a target that is not the baseline sales forecast and one that executives acknowledge will be difficult to achieve, they said. They declined to be identified as they were not authorized to speak to the media.
A big factor that makes selling 1.4 million vehicles this year more of a challenge is Toyota’s manufacturing capacity -- which the two individuals said remains strained.
“If we could resolve this capacity issue, it would be easy to make the 1.4 million target. With sufficient capacity, we can possibly sell 1.5 million vehicles,” one of the two people said.
Toyota’s forecast for 2018 is relatively more upbeat than the previous few years in part because it expects to launch a couple of potentially high-volume subcompact crossovers later this year, the people said.
They said Toyota plans to launch two China-market versions of the subcompact Toyota CH-R crossover in the June-July time frame. The CH-R hit showrooms in the United States in April.
The two CH-R variants are small crossovers that other automakers, most notably Japan’s Honda Motor Co., have leveraged to grow sales significantly in China.
A Toyota spokesman said that though the 2018 sales target was not one that can be easily achieved due to the highly competitive market, the recent launch of a redesigned Camry sedan and the planned introduction of two subcompact crossovers later this year would enable Toyota to challenge the previous year's numbers.
China’s overall light-vehicle vehicle market grew at the weakest pace last year in at least two decades, increasing just 3 percent year-on-year to 28.88 million. Market growth suffered after the discontinuation of tax breaks on smaller-engine cars that begun in 2017.
According to data from the China Association of Automobile Manufacturers, 2018 will see another period of year growth. It predicts the country’s vehicle market will grow 3.5 percent in 2018.
On Friday, Toyota said its sales in China in January rose 25 percent from a year earlier to 127,500 vehicles. Smaller rival Honda's sales in China, meanwhile, rose 11 percent in January to 126,174 vehicles.
Honda, which last year sold 1.44 million vehicles in China, did not provide a forecast for 2018 volumes.