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Today's Date: 09 February 2012
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Toyota chief visits China
1 march 2010

BEIJING—Akio Toyoda's visit to Beijing reflects the importance for Toyota Motor Corp. of containing damage to its reputation in China's huge market, where the Japanese company was struggling even before its recent recall problems.

The 53-year-old Toyota president and grandson of the company's founder is expected to hold a press conference in the Chinese capital Monday evening to address quality concerns, the company said. He also is expected to meet with high-level government officials to remind them of the company's commitment to safety and quality, according to Toyota executives who briefed reporters Sunday night.

"Given China's strong sense of rivalry with the U.S., after we explained our situation to American lawmakers and apologized to U.S. customers last week, there isn't an option for Mr. Toyoda and the company to skip China," one U.S.-based senior Toyota executive, who is close to the Toyota president, said in a telephone interview Sunday. According to Toyota, Mr. Toyoda arrived in Beijing Saturday night after flying to China directly from the U.S.

Toyota's quality issues haven't been as severe in China as in the U.S., where it has recalled millions of cars over problems with accelerator pedals and other issues. In China, Toyota has recalled 75,552 RAV4 vehicles, a tiny fraction of the 8.5 million vehicles it has recalled world-wide.

But Toyota's overall recalls in China rose sharply last year—it recalled a total of 989,000 vehicles in China in 2009, up from the 209,000 in 2008. And China's quality watchdog warned in a notice late last week that there could be more Toyota cars in China affected by the current recalls, pointing to the existence of Toyota cars brought into China outside its formal distribution channels. A Toyota spokesman said the number of such cars in China should be "very small."

Toyota was late to expand in China, and it has lagged behind global rivals like Volkswagen AG and General Motors Co. That has hurt the company, as China overtook the U.S. last year as the world's biggest car market, with sales surging about 50% to 13 million vehicles, compared with just over 10 million in the U.S.

Toyota fell severely behind the market last year—its sales grew just 21% in 2009 to 700,900 vehicles—because it failed to provide cars that matched consumers' growing appetite for smaller, more fuel-efficient cars. China's government has encouraged the purchase of such cars through incentives and other stimulus measures, a policy the car maker didn't anticipate.

The China visit follows a multistop fence-mending tour in the U.S. last week during which Mr. Toyoda appeared before a Congressional committee to answer often-angry questions about Toyota's quality problems. He also apologized to victims of sudden acceleration accidents and to customers concerned about the spate of quality problems, and sought to reassure Toyota's dealers and workers that the company will regain its footing. The trip was highly emotional, with Mr. Toyoda occasionally choking up.

 
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