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Toyota & FAW restructure their joint company

By Niranjan Mudholkar,

Added 27 April 2020

With the aim of sustainable growth in China

The goal of the restructuring is to better respond to China’s rapidly changing markets.

China FAW Group Co., Ltd. (FAW) and Toyota Motor Corporation (Toyota) will restructure their management systems with the aim of achieving sustainable growth in China. As part of the restructuring, Tianjin FAW Toyota Motor Co., Ltd. (TFTM) will become a FAW-Toyota manufacturing and supervising affiliate; all other body and engine manufacturing affiliates will become wholly owned subsidiaries of TFTM.

More specifically, the restructuring affects the following four companies within the FAW and Toyota joint enterprise: the body manufacturing affiliates Sichuan FAW Toyota Motor Co., Ltd. (SFTM Chengdu) and SFTM Changchun Fengyue Co., Ltd. (SFTM Changchun), and the engine manufacturing affiliates Tianjin FAW Toyota Engine Co., Ltd. (TFTE) and FAW Toyota (Changchun) Engine Co., Ltd. (FTCE).

The goal of the restructuring is to better respond to China's rapidly changing markets. By centralizing management of manufacturing affiliates under TFTM, the entire production system can be optimized; this will result in a more effective use of resources and more efficient operations and this, in turn, is expected to lead to improved competitiveness. The restructuring is also intended to clarify reporting lines, thereby strengthening governance and accelerating decision-making processes at all its affiliates.

 

Joint Company's Management Systems

Tatsuro Ueda, Chief Executive Officer of Toyota's China Region, said: "Thanks to the support of the Chinese government, our partner FAW, and our Chinese customers, the FAW-Toyota business will next year celebrate its 20th anniversary. After discussions with FAW, we decided to reorganize our management systems with the goal of achieving lasting growth for FAW-Toyota."

As part of this restructuring, FAW Toyota Research & Development Co., Ltd. (FTRD), FAW-Toyota's research and development company, will also become a wholly owned subsidiary of TFTM. There is no change in the ownership of FAW Toyota Motor Sales Co., Ltd., FAW-Toyota's sales company; in practice, however, its management will report to TFTM, and by unifying its management, it will seek to realize a single streamlined structure from development through production to sales. Going forward, all Toyota enterprises in China will work together to make cars that provide its Chinese customers with happiness.

END

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