Move aims to ensure products for the Chinese market are made from a Chinese perspective to boost product desirability.
In a strategic pivot to regain its footing in China’s fiercely competitive electric vehicle (EV) market, GAC Toyota has announced it will transfer decision-making authority for new car development from Japan to China.
The move aims to place local personnel with deep market expertise at the forefront of research and development (R&D), ensuring faster and more tailored vehicle production.
Yoshiaki Konishi, head of Toyota’s EV R&D centre in China, unveiled the plan at a recent GAC Toyota technology event, stating that the company will adopt a more autonomous, China-focused approach to vehicle development.
This shift marks a significant departure from Toyota’s traditional reliance on global models and centralised decision-making in Japan.
Under the new strategy, Toyota will expand its Regional-Chief Engineer (RCE) system, empowering Chinese engineers to lead R&D for new models and facelifts.
“In China’s fast-changing market, Toyota must conduct local R&D independently to stay competitive,” Konishi said. The company believes this will streamline development cycles and produce vehicles better aligned with domestic consumer preferences.
The decision comes as Japanese automakers face increasing marginalisation in China, where domestic brands—armed with sharper insights into local demand—are dominating new energy vehicle (NEV) sales.
Data from the China Passenger Car Association (CPCA) reveals that in May, NEVs accounted for 52.9% of all new car retail sales, with domestic brands holding a commanding 74.6% share. In stark contrast, mainstream joint-venture brands, including Japanese manufacturers, managed just 6.4% penetration.
Toyota is not the first Japanese automaker to recalibrate its China strategy. Nissan’s joint venture, Dongfeng Nissan, launched the China-developed N7 electric sedan in late April, securing over 17,000 orders within 35 days.
Toyota itself has already seen promising results from its localised efforts with the bZ3X, its first all-electric SUV developed under the RCE system on the platform of the AION V, sold 15,000 units in its debut month after launching in March at a competitive ¥109,800 (£12,000) starting price.
GAC Toyota’s next locally developed EV, the bZ7, is slated for release in early 2026, and will integrate Huawei’s Harmony cockpit system and DriveONE motor, alongside compatibility with Xiaomi’s accessory ecosystem—including wireless chargers and smart walkie-talkies.
Additionally, the brand’s popular Highlander SUV and Sienna MPV will soon offer extended-range electric (EREV) variants, further diversifying its NEV lineup.
The shift underscores Toyota’s recognition that success in China’s EV market requires more than global brand strength—it demands hyper-localised innovation.
By entrusting Chinese teams with greater autonomy, the company hopes to close the gap with domestic rivals and reclaim its position in the world’s largest automotive market.
As Konishi emphasised, “This transformation will accelerate our ability to build better cars, right here in China.”
With these changes, GAC Toyota signals a broader trend: foreign automakers must adapt swiftly or risk fading into irrelevance in China’s electrified future.
