In 1988, when the first car rolled out of the Toyota plant in Kentucky, Japan's No. 1 automaker sold more than 610,000 vehicles in the US, raising fears that it could overtake the US Big Three.
When China's first Toyota-branded car emerges in October from a plant in Tianjin, near Beijing, the company will face an entirely different challenge.
PHOTO: AP
Toyota Motor Corp won't have to worry about placating fears about the loss of jobs as it had to do in the US more than a decade ago. Instead, Toyota must tackle a consumer car market that has barely been born.
On paper, a nation of 1.26 billion people looks like a sales boom waiting to happen. The reality is a market largely limited to luxury cars for government officials and the handful of rich in a communist country that is only beginning to open up.
The Chinese auto industry is a chaotic rat-race crawling with some 100 auto companies, many producing clunkers.
But the Chinese market is a pillar of Toyota's ambition to control 15 percent of the world's auto market by 2010, possibly clinching the No. 1 automaker spot by beating out General Motors Corp and Ford Motor Co.
Having scored success in both the US and Japan, Toyota now ranks No. 3 among the world's automakers in vehicle production, controlling about 10 percent of the global market. GM controls 15 percent, while Ford has about 12 percent.
In China, however, Toyota -- or Fengtian as they say here -- is still an expensive import rarely seen on the streets and unthinkable as a purchase even for many middle-class people. Toyota sold just 15,000 cars last year in China.
The Toyota name is also associated with the rickety Xiali cabs that dodge jaywalkers and bicycles on jam-packed streets. Xiali models have been manufactured since the mid-1980s by Toyota's Chinese partner Tianjin Xiali using Toyota technology.
"I plan to buy a car, but I definitely can't buy a Toyota. One problem is price," said Lan Hai, who doesn't own a car but often drives the imported US$34,000 Toyota Corolla that belongs to the fire department that employs him.
Lan believes the less fancy, locally made models that go for half that price are more in his range. But if the price is right, perhaps US$14,500, Lan said he won't hesitate to buy a Toyota.
"Japanese car or Chinese car, I buy the car I want," Lan said.
Whether drivers like Lan will someday be able to afford a made-in-China Toyota remains to be seen. Even a relatively cheap car can cost a dozen years' worth of a worker's pay.
Toyota refused to disclose the price of the still unnamed car to be unveiled at the Beijing Auto Show in June. But the company said it will likely be less expensive than the Honda Accord manufactured in China since 1999, which sells for US$36,000 and has an image far more upscale than Accords have in other parts of the world.
Company officials promise the new car will meet the same quality standards as Japan-made Toyotas.
"We're going to win customers' trust through our reliable maintenance service that comes after the purchase. That's still new in China," said Takashi Hasegawa, president of Tianjin Toyota Motor Co.
One drawback for Toyota is that it's a latecomer in China, where GM already produces more than 58,000 cars a year and Volkswagen makes 364,000.
In April, Honda, Toyota's top rival in Japan, began making a second model in China, the Odyssey minivan, with plans to raise production capacity at its Chinese plant from the current 51,000 to 120,000 by 2003.
But Toyota said it has been preparing for its arrival in China for years. Not only has it cultivated its relations with its Chinese partner, it has brought an engine maker and other affiliate suppliers from Japan to the Tianjin area in recent years.
Toyota plans to produce 30,000 of the new cars annually.
Shinji Kitayama, auto analyst at Shinko Securities Co in Tokyo, believes Toyota has a good chance in China, given its strength in compacts.
"Toyota is going after the mass consumer car in China," Kitayama said. "But in the beginning, competition is going to be intense."
But no one can be sure what the Chinese will want in a car. Toyota is betting they'll want a vehicle that looks like a car rather than the SUVs so popular in the US and Japan.
"There's no mistake the demand for cars is growing in China," said Tetsuji Okada, general manager of Toyota's China Division. "But we really don't know what's going to sell."
The shabby homes, stretches of dusty earth and the rows of commuter bicycles in Tianjin are stark reminders of the poverty still prevalent in China -- perhaps the biggest obstacle to Toyota's drive toward success here.
Liu Shugang, a 35-year-old Tianjin Toyota employee who drives a tiny US$4,800 Chinese-made car, isn't sure he can afford the new Toyota. But he's sure his nation can learn from Toyota.
"Living in an island nation with no resources, Japanese people have a sense of crisis and feel they have to keep working harder. That sense of crisis is missing in China," Liu said.
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