GAC Toyota, one of Toyota Motor’s joint ventures in China, will transfer decision-making responsibilities for new vehicle development from Japan to China, the automaker said, as it aims to adapt more rapidly to the demands of the local electric vehicle (EV) market.
The change was announced by Yoshiaki Konishi, head of Toyota’s EV research and development center in China, during a technology event hosted by GAC Toyota on Wednesday. The move will see the company expand its RCE (Regional-Chief Engineer) system, allowing local teams to lead R&D efforts for new models and product facelifts.
“In China’s rapidly changing market, Toyota should conduct local R&D independently of global models,” Konishi said. “This will transform Toyota’s previous working methods and accelerate the production of better cars in China.”
The strategy marks a shift in Toyota’s approach as it faces growing pressure from domestic competitors, who command a significant share of China’s booming NEV (new energy vehicle) sector. According to data from the China Passenger Car Association, NEVs accounted for 52.9% of retail vehicle sales in May, with domestic brands contributing 74.6% of those sales. By contrast, joint-venture brands made up just 6.4%.
GAC Toyota is already seeing results from greater localization. Its first locally developed EV under the RCE system, the bZ3X, launched in March with a starting price of RMB 109,800 ($15,150) and recorded 15,000 units sold in its debut month. A second model, the bZ7, is scheduled for release in the first quarter of 2026 and will feature Huawei’s Harmony cockpit and DriveONE motor, as well as integration with Xiaomi’s accessory ecosystem.
The company also plans to release extended-range electric vehicle (EREV) variants of its Highlander SUV and Sienna MPV in the Chinese market.
The strategic pivot mirrors similar efforts by other Japanese automakers. Nissan, for instance, introduced the N7 electric sedan—developed by its Chinese joint venture Dongfeng Nissan—which received over 17,000 orders within just over a month of launch.
Toyota’s localization push comes as it continues to adapt to a market where speed, pricing, and technology innovation are critical to gaining ground.