Toyota to make largest auto recall in China

SHANGHAI (Reuters) - Toyota Motor Corp 7203.T will recall 688,314 Camry and other sedans made at its two China joint ventures from Tuesday, its largest recall in the country, to fix a faulty electric switch to the window.

But analysts say the recall will not have any long-term impact on the Japanese auto maker’s growth prospect in China as the defect is minor and only involves a single supplier.

The recall, which comes at time when Toyota has lost some of its steam after years of breakneck growth, may however swing some buyers to its European and U.S. rivals for now, they said.

“The size of the recall is big, but it won’t be a major problem for Toyota given the nature of the defect. Still, there will be some impact for the short term,” said Huang Zherui, an analyst with CSM Worldwide, a global industry consultancy.

In the first half, the Japanese automaker sold 284,000 passenger cars in China, almost unchanged from a year earlier, due largely to its limited offering of small models.

In contrast, General Motors GM.UL reported a 38 percent rise in its sales in the country, helped by Beijing's aggressive cut in sales tax for small cars.

Toyota’s recall, announced by China’s quality watchdog late on Sunday, included 384,736 Camry models made by Toyota’s joint venture in south China with Guangzhou Auto between May 15, 2006 and December 31, 2008.

A total of 22,767 Yaris compact cars made by the same venture between May 15 and December 31 of last year will also be recalled, the statement said.

The list also included 35,523 Vios cars made at its joint venture with FAW between February 18 and December 25 of 2008 and 245,288 Corolla models made at the venture from May 17, 2007 to December 25 of 2008, it said.

A spokesman for Toyota’s China operations said he had received no reports of casualties or accidents linked with the defect.

Guangzhou Auto is the parent of Hong Kong-listed Denway Motors 0203.HK.

Reporting by Fang Yan and Jacqueline Wong