Behind the leadership transition lies Toyota China's resolute commitment to transform.

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On January 21, Li Hui officially assumed the role of general manager of Toyota China, marking him as the first Chinese national to hold this position.

Moreover, Li Hui recently announced that beginning in 2025, Toyota will establish its own research and development (R&D) system in China.

This signifies that Toyota's transformation in China has evolved from technology and product localization to encompass talent and R&D system localization.

Amidst a "do-or-die" crisis faced by most joint venture automakers, Toyota China's decision to "change leadership" at this juncture can be seen as a strategic response. Its significance lies in swiftly adapting to market changes, accelerating corporate transformation, and enhancing brand strength and sales.

"Feeling" the Pulse

The Chinese automotive market entered a period of intense reshuffling in 2024, with established players like BYD and Geely firmly establishing their discourse power. Once-prominent joint ventures have hit a development bottleneck, while new force brands such as HiPhi and G-Auto have abruptly faltered. Cross-border tech giants like Xiaomi and Huawei have taken up the mantle of innovation...

The Chinese automotive market has never witnessed such rapid rise and fall, nor has the industry experienced such unprecedented growth.

As part of this landscape, joint venture automakers must sharpen their perception of market demand shifts to enhance the speed and accuracy of their strategic decisions.

This implies that the R&D chain centered on the headquarters of joint venture automakers in the past no longer meets current market demands. There is an urgent need to relocate the decision-making center to where one can "feel the pulse," thereby improving local market perception and adaptability. As an old saying goes, "Generals on the battlefield are not bound by the emperor's orders."

Toyota China's promotion of Li Hui, the executive deputy general manager of Lexus China, to the position of general manager of Toyota China, is grounded in these considerations. Localized management has become a pivotal means for Toyota to bolster its competitiveness, underscoring its emphasis on and open attitude towards the Chinese market.

Li Hui's appointment as the general manager of Toyota China is a testament to his capabilities.

Having joined GAC Group in 2000, Li Hui has amassed extensive management experience in the automotive industry over the past 25 years. He has witnessed the meteoric rise of GAC Toyota in the domestic market and possesses a profound understanding of the Toyota system.

In 2009, Li Hui was appointed as the deputy minister of the sales department of GAC Toyota, coinciding with the explosion of joint venture automakers. That year, Toyota sold approximately 709,000 vehicles in China, marking a 121% year-on-year increase.

In 2013, Li Hui transitioned to GAC Group as executive deputy general manager, officially participating in the company's strategic planning and management. It was with this experience that Li Hui began fully operating a brand in 2019, serving as executive deputy general manager of Lexus China.

Over the following three years (2019-2021), annual sales of Lexus in the Chinese market surpassed 200,000 units, peaking at 227,000 units in 2021.

Although Lexus experienced a sales dip in 2022 due to the combined impact of the pandemic and the rise of Chinese new energy brands, it stabilized its annual sales at over 180,000 units in the subsequent years of 2023 and 2024.

Clearly, Li Hui has achieved remarkable "results" at both GAC Toyota and the Lexus brand.

At the dawn of 2025, Li Hui took the helm as the general manager of Toyota China.

Certainly, Japanese leadership values not only Li Hui's prowess in business operations but also hopes he can be the one who "feels the pulse" and makes swift decisions in response, with the aspiration that Toyota can achieve breakthroughs in the Chinese market.

Li Hui is acutely aware of this and once told the media at the Guangzhou Auto Show, "True 'localization' is akin to playing baseball; you must throw it out and catch it."

He means that the pitcher, positioned in the Chinese market, must accurately and swiftly throw out and hit the local demand; then, the Japanese headquarters must be able to catch it; finally, the decision is executed to yield results."

Currently, amidst the overall decline in the imported car market, Lexus has withstood market pressures with its robust brand and product power, emerging as the brightest spot in China's imported car market in 2024.

Lexus's successful stabilization of the basic market and upward trend against the tide have already validated Li Hui's ability to swiftly respond to changes in the Chinese market.

Factory Construction in Shanghai: A Milestone in Intelligent Electrification

Li Hui's appointment signifies that Toyota will place greater emphasis on its localization strategy in the Chinese market. As China stands at the epicenter of global automotive market transformation, only through deep integration of electrification and intelligence can it win the favor of consumers.

The fuel vehicle market is continuously being compressed, coupled with the ascendancy of independent brands. These factors have dealt a heavy blow to Japanese brands, which once dominated the fuel vehicle market, and Toyota is no exception.

However, amidst the challenges and difficulties of electrification, Toyota's response is relatively swift among joint venture automakers.

Toyota's localization strategy extends beyond talent selection to leveraging China's advantageous resources to breakthrough in intelligent electrification. It is reported that Toyota Motor has decided to build a new electric vehicle factory in Shanghai to produce Lexus electric vehicle models, with production slated to commence in 2027.

There are three reasons why Toyota chose this juncture to enter Shanghai and establish a factory, in addition to accelerating the electrification process.

Firstly, Toyota is poised to usher in a new era of electric vehicles. As the second-generation electric vehicle battery, Toyota holds over 65% of the patents for all-solid-state batteries worldwide. According to recent news from Toyota, the company's solid-state battery technology has reached a level where it can travel 1,200 kilometers on a 10-minute charge and is fully capable of mass-producing all-solid-state battery vehicles.

Secondly, the Yangtze River Delta region, centered on Shanghai, was previously dominated by German Volkswagen and American General Motors. Currently, General Motors' Shanghai factory has closed, and Volkswagen has also announced production cuts. Amidst the decline of German and American fuel vehicles, if Toyota enters Shanghai with high-quality electric vehicles, it stands a chance to seize the market share vacated by German and American automakers. Moreover, the Yangtze River Delta is also a major sales hub for electric vehicles such as Tesla and NIO. Toyota's strong entry will undoubtedly impact the market structure.

Thirdly, it is rumored that Toyota will build the factory as a sole proprietorship. Toyota's vehicle manufacturing capabilities far surpass those of Tesla, so Toyota has the potential to obtain the same or even more preferential policy support as Tesla, seeking to maximize the benefits of developing the electric vehicle industry in China.

Previously, Akio Toyoda, chairman of Toyota Motor Corporation, stated that Lexus will achieve 100% sales of pure electric vehicle models in the three major markets of China, North America, and Europe by 2030, with a goal of reaching global sales of 1 million units. By 2035, it will achieve 100% sales of pure electric vehicle models globally.

This underscores that the Lexus pure electric vehicle factory is a crucial aspect of Toyota's transition to intelligent electrification.

Furthermore, Li Hui recently announced that starting in 2025, Toyota will establish its own R&D system in China. It is evident that Toyota will delegate more planning and development responsibilities to local teams in China, particularly in the realms of electric vehicles and intelligent connectivity.

Not long ago, GAC Toyota also announced that it will comprehensively establish a local product development system, with the local team in China overseeing 100% of the products produced in China, from planning, development, verification and evaluation to lifecycle management. Such rapid and thorough localization is bound to impress peers.

Whether it's building a more localized team, responding faster to the market, promoting intelligent electrification, or collaborating with local supply chains, all these efforts demonstrate the changes and commitments made by Toyota for Chinese consumers.

As the world's largest automaker, Toyota possesses extremely robust technological development capabilities, production technology, and substantial financial backing. With these advantages, Toyota's transformation may prove smoother than anticipated by the outside world.

It remains to be seen whether the Toyota China team led by Li Hui can help Toyota swiftly secure a firm foothold in the fiercely competitive Chinese electric vehicle market and how Lexus will adhere to Toyota Motor's overall strategic layout for electric vehicles and the next battle for high-end products.