Toyota Creates Logistics Firm

TIANJIN, China -- Toyota Motor Corp. has established a logistics management company in China that it will use to consolidate distribution operations and slash costs. The company's birth is part of Toyota's efforts to boost sales in the country to some one million units by the early 2010s, about threefold from 2006.

Tong Fang Global Logistics Co., located in the Tianjin Economic and Technological Development Zone, is capitalized at $5 million. Toyota holds a 40% stake, with China FAW Group Corp. taking 35% and Guangzhou Automobile Group Co. holding 25%.

The new firm has approximately 40 employees, with some coming from Toyota. It will handle automobile distribution chores previously done by local affiliates, in addition to tackling auto parts control.

Also, Toyota Transportation Co. plans to enter India by next year, forming a joint venture with a local company to offer ground delivery of vehicles made in that country by parent Toyota Motor.

By expanding overseas, the shipping company seeks to compensate for stagnant demand in Japan, where new-car sales have been slumping.

The planned firm is expected to plant itself in Bengaluru, formerly Bangalore, where a Toyota assembly factory is situated. Toyota Transportation is searching for a partner and plans to hammer out details as soon as early next year. The Japanese company intends to take majority control of the venture, which may also be partly owned by a third party - possibly a trading house.

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