Toyota in China: It’s set to ride out the tremors of geopolitics

The Japanese carmaker adapted swiftly to an electric market shift

- JULIANA LIU

Spiralling diplomatic ties between Japan and China are sure to affect some businesses.

But one company is poised to stand its ground: Toyota. After all, the world’s biggest carmaker has already survived a much bigger challenge—a tectonic shift in China's auto industry that has decimated most foreign players there.

Even though shipments last year were 14% lower than the 2022 peak, that's nowhere nearly as devastating as its global peers. Sales at Ford were more than 80% lower than its 2016 all-time high. Revenue at Volkswagen, whose ubiquitous boxy Santanas symbolized private car ownership during China’s go-go years, was down about a third last year from its record.

The turning point for the domestic auto sector came around 2020, two decades after a mechanical engineer named Wan Gang returned to China after years spent working for Audi in Germany. He promised Chinese authorities that while foreign automakers dominated petrol cars, Beijing had a chance to pull ahead by betting on electrification. Eager to reduce its dependence on imported oil, officials put him in charge of a state-led effort to develop a market for clean-energy vehicles.