Toyota Motor Corp. is counting on demand for sport utility vehicles to reverse a drop in China sales, even as demand for the models collapses in the United States.
"SUV sales are showing strong growth in China," Shoju Nozaki, executive vice president of Toyota Motor (China) Investment Co., said Monday at the Shanghai auto show. The carmaker started selling made-in-China RAV4 SUVs earlier this month and will start producing the Highlander SUV at a plant in Guangzhou in May.
Toyota is challenging Honda Motor Co.'s CR-V, China's top SUV brand, after the category withstood a slowdown in vehicle sales last year. China's SUV sales surged 25 percent in 2008, compared with a 7 percent increase for the overall car market, according to the China Association of Automobile Manufacturers.
"Cars like the RAV4 are targeting the rich in China," said Toshio Konishi, who helps manage about $1.3 billion at Polar Capital Partners in Tokyo, including Toyota shares. "Toyota can't feed their appetite for status symbols fast enough."