SHANGHAI, July 24 (Reuters) – Toyota Motor Corp (7203.T) has dismissed some workers at one of its plants in China, three workers told Reuters, as the Japanese automaker struggles with a price war and sales slump in the world’s largest auto market.
The joint venture between Toyota and China’s state-owned Guangzhou Automobile Group (GAC) (601238.SS) laid off the workers over the weekend and offered them compensation, said the workers, who declined to be named for privacy.
The workers affected were hired by labor service companies and dispatched to work at the factory of GAC Toyota in the southern city of Guangzhou.
Reuters was unable to determine how many workers in total were dismissed. GAC and Toyota did not immediately respond to requests for comment on Monday.
The GAC Toyota factory has an annual output capacity of 1 million vehicles and employs around 19,000 people, according to its website. It produces models including Camry, Levin and bZ4X.
Toyota’s move comes after peer Mitsubishi Motors (7211.T) said earlier in July it would cut staff costs at its Chinese joint venture with GAC to try to revive its fortunes.
Mitsubishi Motors Chief Executive Takao Kato told reporters during an earnings call on Monday that the company had not yet agreed with its local counterpart in China exactly how it would pursue the restructuring. The production of Mitsubishi’s new Outlander model remained suspended, Kato added, describing the conditions faced by the company in China as “severe”.
Japanese brands suffered the steepest sales slumps among automakers in China in the first half of this year, with their market share shrinking to 14.9% from nearly 20% a year ago, according to China Association of Automobile Association. Meanwhile, sales of Chinese brands accounted for 53% of the total.
Toyota has been counting on its electric vehicle (EV) models to revive sales in China, which fell 9% in the first six months. The company joined a price war started by Tesla in January and slashed the starting price for its bZ4X EV by 15% in February.
