GUANGZHOU -- Toyota Motor jumped to second place from fifth in China's January-September passenger car sales, beating rivals like General Motors as its green tech push and aggressive sales efforts bore fruit.
The Japanese automaker claimed 7.8% of the country's new passenger car unit sales during the nine months, up from a fifth-place 6.4% slice a year earlier, according to U.K. research company LMC Automotive. It trailed only Volkswagen, and was followed by GM and China's own SAIC Motor, with Toyota compatriot Honda Motor taking fifth place.
Toyota's advance comes amid an overall sales decline in China. The automaker has been working to strengthen ties with Beijing while promoting green technologies and expanding its dealership network. Its energy-efficient offerings grew in popularity as Chinese rivals struggled on this front.
The company unveiled its first electric offering in its premium Lexus lineup at the Guangzhou International Automobile Exhibition, which opened Friday. Lexus International President Yoshihiro Sawa described the UX 300e compact sport utility vehicle as a "crucial model that responds to demand in light of China's state-level push to advance electric vehicles."
Toyota also announced SUVs tailored exclusively to the Chinese market with local joint venture partners, aiming to capture demand from young drivers. SUVs, which account for about 40% of the Chinese passenger-car market, can sway the power dynamic among automakers.
China's overall new car sales for January-September shrank 10.3% on the year to 18.37 million units. After a strong performance earlier, sales of new-energy vehicles, including electric cars, have slid on the year since July, with a nearly 50% dip in October. The drop owed largely to a reduction of government subsidies in late June.
While major players like GM, the private brand of its partner SAIC Motor, and China's largest private automaker Zhejiang Geely Holding Group lost ground in unit sales, Honda surged 13% on the back of its Civic line's popularity with young people. Toyota enjoyed an 8% rise aided by its Corolla line.
LMC Automotive analyst Alan Kang cited Toyota's designs geared toward local youths, its price tags and its rich product lineup as the reasons behind its success. The Japanese automaker is currently adding local dealerships at a rate of about 50 per year. As of January, its Chinese network -- including Lexus -- had reached about 1,300 dealerships.
Japanese have benefited from domestic players' struggle with "China VI" vehicle emission standards implemented in urban regions in July. American cars have also lost their sheen amid trade tensions between Washington and Beijing.
One official with an American automaker in China pointed to May 2018 as the point when Toyota's fortunes began to climb. When Chinese Premier Li Keqiang visited Japan that month, he was given a tour of the automaker's facilities in Hokkaido by President Akio Toyoda. Li reportedly showed interest in the potential for Toyota technologies to aid in environmental efforts.
Toyota had already been setting its sights on China for several years at that point, and the ongoing improvement in Sino-Japanese relations has given it an extra lift. "After establishing a trusting relationship with top leaders, Toyota appeared to have stepped on the gas," said one Chinese government official.
For the full year, Toyota aims to raise its Chinese new-car sales by 8% to 1.6 million units. The Japanese automaker now views the Chinese market as second only to the U.S. in importance surpassing its home turf. For the time being, it appears to be looking at the 2 million unit mark.
Masahisa Yuzawa and Takashi Kawakami in Guangzhou also contributed to this report.