Toyota's China sales stall due to lack of small vehicles

Japanese car manufacturer Toyota saw its first-quarter sales in China fall 17% year-on-year due to a failure to anticipate increased demand for small, affordable cars, the Wall Street Journal reported. The company sold 125,743 vehicles in the first quarter. By comparison, General Motors recorded a 17% increase in first-quarter sales to 363,317 units, and has since claimed that April sales growth hit 50% year-on-year. Other foreign automakers such as Nissan, which saw a 29% increase in sales, have also reported strong first-quarter figures. Demand for small cars grew by 4% to 2.7 million units during the first three months of 2009 after the government cut sales taxes on cars with engines of 1.6 liters or smaller, and offered rebates for rural residents buying new cars. Toyota is scrambling to boost output of 1.6-liter engines for the Corolla lineup by about 65% at its plant in Tianjin.