Toyota Motor Corporation (NYSE:TM) revealed Monday that its joint venture with China’s state-owned Guangzhou, the Guangzhou Toyota Motor Co, has terminated early contracts of about 1,000 dispatch workers. The decision comes amidst mounting pressure from a price war in the world's largest auto market.
The workers affected were hired by labor service companies and dispatched to work at the factory of GAC Toyota in the southern city of Guangzhou.
Guangzhou Toyota Motor Co, announced in a statement the early termination of contracts for approximately 1,000 workers with labor services companies due to recent production levels.
According to its website, the GAC Toyota factory boasts an annual output capacity of 1 million vehicles and provides employment to approximately 19,000 individuals. The factory is responsible for producing various models, including popular ones like Camry, Levin, and bZ4X.
Toyota has been relying on electric vehicle models to reinvigorate sales in China, where sales had declined by 9% during the first six months. To compete effectively in the market, the company joined a price war initiated by Tesla (NASDAQ:TSLA) in January. As part of its strategy, Toyota reduced the starting price for its bZ4X EV by 15% in February. A move aimed at gaining a competitive edge and attracting more customers in the growing Chinese EV market.
Shares of TM are up 1.25% in mid-day trading on Monday.