Toyota Tsusho to Expand China Dealer Network
[2009-06-18]
Toyota Tsusho Corp, Japan's sixth-biggest trading company and an affiliate of Toyota Motor Corp, said it planned to increase its Toyota dealerships in China to cope with strong demand.
However the trading firm, heavily involved in Toyota's overseas production and sales, warned profits from global car sales would nearly halve this financial year, as it shares in the pain from the worldwide crisis for the motor industry.
To combat those problems, Toyota Tsusho said it saw potential in emerging economies such as China and Latin America where car dealers were still scarce. "We plan to increase our dealerships, some through mergers and acquisitions, in China to keep pace with the strong demand growth there," Junzo Shimizu, president and CEO, told Reuters in an interview.
The new dealerships, to take the number to 30 within a year from a current 26, will be mainly in inland China, he said. It planned to double its China dealer network to around 50 within four to five years.
Toyota Tsusho, owned 21.5 percent by Toyota Motor, suffered its first profit fall in 10 years in the year to March 2009 as global car sales crumbled and Toyota put expansion plans on hold, dealing a blow to the trading company's business of supplying processed metals, machinery and parts to Toyota plants.
"Global demand for cars will stay at around 70 percent of its peak in the next several years," Shimizu said.
The company was researching lithium deposits to meet surging demand for the minor metal, used in batteries for hybrid cars, he said.
Toyota Tsusho forecast in April its operating profit would fall 37 percent to 57 billion yen in the financial year to next March, after a 31 percent decline last year.
However the trading firm, heavily involved in Toyota's overseas production and sales, warned profits from global car sales would nearly halve this financial year, as it shares in the pain from the worldwide crisis for the motor industry.
To combat those problems, Toyota Tsusho said it saw potential in emerging economies such as China and Latin America where car dealers were still scarce. "We plan to increase our dealerships, some through mergers and acquisitions, in China to keep pace with the strong demand growth there," Junzo Shimizu, president and CEO, told Reuters in an interview.
The new dealerships, to take the number to 30 within a year from a current 26, will be mainly in inland China, he said. It planned to double its China dealer network to around 50 within four to five years.
Toyota Tsusho, owned 21.5 percent by Toyota Motor, suffered its first profit fall in 10 years in the year to March 2009 as global car sales crumbled and Toyota put expansion plans on hold, dealing a blow to the trading company's business of supplying processed metals, machinery and parts to Toyota plants.
"Global demand for cars will stay at around 70 percent of its peak in the next several years," Shimizu said.
The company was researching lithium deposits to meet surging demand for the minor metal, used in batteries for hybrid cars, he said.
Toyota Tsusho forecast in April its operating profit would fall 37 percent to 57 billion yen in the financial year to next March, after a 31 percent decline last year.
Source: Reuters
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