Toyota president apologizes to Chinese customers

[March 01, 2010]  BEIJING (AP) -- Toyota President Akio Toyoda apologized Monday to the company's customers in China, the fast-growing market that has become increasingly important to automakers as they struggle with weak global sales.

The number of Toyota vehicles recalled in China makes up only a small percentage of the 8.5 million pulled worldwide since October for sticky gas pedals, faulty floor mats and glitches in braking software.

But auto sales in China have become increasingly critical for automakers as sales lag in traditional markets. Last year, China overtook the United States as the biggest auto market, with a 48 percent jump in sales, and automakers are looking to it to offset weak global demand and drive future growth.

"The Chinese market is very important, so I flew here in person in the hope my personal expression of an apology and explanation will give customers some relief," Toyoda told news conference of the massive worldwide recalls of Toyotas.

Toyoda's appearance was his second abroad following last week's visit to Washington, where he was grilled by angry lawmakers. He said he flew to China directly from the U.S. to show his sincerity.

Toyoda said China was important to his company and reiterated earlier statements that, with his family name on the product, he is personally responsible for safety.

The president said that in response to the crisis, Toyota will create a global quality committee with a chief quality officer from each region.

"The incident had caused an impact and worries to Chinese consumers," Toyoda said, appearing unemotional as he spoke to about 300 reporters. "I hereby express my sincere apologies for these worries."

China's state-controlled media have made only muted comment on the recalls, in contrast to the blistering criticism Toyoda faced from American lawmakers.

The flood of recalls in the United States has shaken confidence in Toyota's reputation for excellent quality. In China, the company announced a recall of 75,552 RAV4 sport-utility vehicles in late January due to the gas pedal problem.

Toyota's February sales by its two local joint ventures with state-owned partners were up from a year earlier, according to Passenger Car Association estimates. Sales for its venture with Guangzhou Automobile Group climbed 50 percent to 17,500 units. Sales at its FAW Group venture jumped 106 percent to 40,400 units.

"So far, it's hard to see any direct impact on Toyota's sales," said Rao Da, general secretary of the China Passenger Car Association, an industry group. "The crucial thing for them is brand reputation. If they don't pay great attention to this, it will eventually hurt the customers' trust."

A spokesman for Toyota China, Niu Yu, said monthly sales figures would be released Tuesday.

At a Beijing dealership, the Wu Fang Qiao Toyota Sales & Service Co., sales of the RAV4 are down while Camrys and Corollas, which were not part of the recent recall in China, are selling well, said a salesman, Liu Jinxin. He said he had no exact figures.

"There is certainly an impact on Toyota's sales here because even kids today know about the incident. There are a lot of people calling us and asking questions," Liu said.

Toyota got a relatively late start in China, after fitful efforts to break into the market using tie-ups between its subsidiary Daihatsu Motor Co. and state-run Tianjin Automobile Industry Holding Co.

Toyota rolled out its first made-in-China Camry in May 2006.

Sales growth lagged other foreign brands last year due to Toyota's focus on bigger cars while the government promoted smaller vehicles with tax breaks and subsidies. Toyota sales rose 50 percent, compared with 76 percent for Volkswagen AG and 219 percent for General Motors Co.'s Chevrolet unit.

Toyota is preparing to launch a lower-cost brand for China in response to demand for smaller cars, according to analysts.

In August, its joint venture with FAW recalled nearly 690,000 Camry and Yaris passenger cars after finding problems with electric window controls. There was no apparent effect on sales.

[Associated Press; By JOE McDONALD]

AP Business Writer Elaine Kurtenbach in Shanghai and Associated Press researchers Bonnie Cao in Beijing and Ji Chen in Shanghai contributed to this report.

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