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

China's shift to EVs caught most other foreign players offguard.

(REUTERS)

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.