After two decades of efforts, Toyota Motor Corp (TMC) will win the right to make direct investment into a car-manufacturing project in China, China daily Business Weekly said quoting government and company officials. We are discussing with the government and Tianjin Automotive Industrial Corporation (TAIC) on car models to be launched, general manager of the TMC's China office, Shinji Shimahara said. Official sources told the paper that Toyota is expected to gain approval from the state development and planning commission for establishment of a car manufacturing project in Tianjin in the near future.

The project, which will produce 30,000 cars a year upon completion of the first phase of construction, is also part of TAIC's plan to expand its carproduction capacity to 150,000 units, the report said. TAIC has been manufacturing for several years Xiali Hatchback cars, which are mainly used as taxis in China. Toyota and TAIC will jointly develop the affordable car models, which will be tailored to local road conditions and the requirement of Chinese customers, the report said.

Toyota has so far invested more than $366 million in 28 auto components ventures and a compact bus plant in China.

As many as 59 Toyota sales and service stations have also been established throughout, integrating sales, spare parts' supply and after-sales services. Tianjin Toyota Motor Engine Co, a 50:50 joint venture between Toyota and TAIC has been producing 1300 cc 8A-FE car engines since last July and these engines will be used in the car models to be produced in China, the report said. Toyota's another auto manufacturing venture in China, the Sichuan Toyota Motor Co Ltd, a $67 million joint venture set up last year between Sichuan Passenger Vehicle Manufacturing Co,Toyota Motor and Toyota Tsusho Corp of Japan, is expected to start production of the coaster compact bus in 2001, the paper said.

The production capacity at the initial stage will be 3,000 units and will reach 10,000 by 2005.

Although China's current auto market has come to a standstill, it still has huge demand potential in the long run, Shimahara said.