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New entrepreneurial feast: Zhujiang Delta Auto Parts Factory
On Monday, Guangzhou Toyota Motor Co., Ltd., a joint venture between Japan's Toyota and Guangzhou Automobile Group (GAC), was officially established. This partnership marks a significant step in the automotive industry of southern China. According to the agreement, the total investment in the new joint venture amounts to 3.821 billion yuan, with a registered capital of 1.3 billion yuan. Both GAC and Toyota will each own 50% of the shares, ensuring equal participation in the business.
The initial model produced by the joint venture will be the "Jiamei" sedan, featuring advanced technology and design. The plant is expected to have an initial production capacity of 100,000 units per year, with plans for future expansion based on market demand. Production is scheduled to begin in the first half of 2006, signaling a new era for the local automotive sector.
With Toyota, Nissan, and Honda already having established their vehicle manufacturing and sales operations in Guangzhou, a strong Japanese auto industry cluster is taking shape in the region. Areas such as Nansha Development Zone, the Economic and Technological Development Zone, Huadu, and Zengcheng Yonghe are developing into major auto parts support bases. These industrial clusters bring together scale advantages, resource efficiency, and cost benefits, further boosting the development potential of the Pearl River Delta.
This growing ecosystem is positioning the region as a global hub for auto parts manufacturing. While Zhejiang-based private enterprises aim to develop their own vehicles, Guangdong is focusing on attracting foreign investment in complete vehicle projects. Meanwhile, private companies can benefit from supporting these projects by entering the auto parts industry, which offers higher profit margins and fewer policy risks.
As the automobile industry matures, the profit margin from vehicle sales is expected to decline, shifting focus toward the automotive aftermarket. This sector, often referred to as the largest profit "cheese" in the industry chain, presents new opportunities for small and medium-sized enterprises (SMEs). For many SMEs, supporting Japanese car brands in Guangzhou could mean a golden opportunity at the start of the 21st century.