Toyota has become a price butcher

Author | Chai Xuchen

Editor | Zhou Zhiyu

Joint venture car companies are launching a new offensive.

After the Bozhi 3X claimed the throne in the joint venture pure electric sub-market, on March 5th, GAC Toyota launched an assault on the D-class sedan market with the new Bozhi 7.

It is understood that this D-class luxury sedan, equipped with Huawei's technology, Xiaomi's ecosystem, and Lexus's tuning, is boldly entering the market with a starting pre-sale price of 156,800 yuan, while the fully equipped version is priced at less than 200,000 yuan.

For GAC Toyota, this is a direct counterattack against new forces while the iron is hot.

In fact, the product definition and supply chain integration skills that traditional automakers excel at have not changed; it is just that Toyota, having recognized the situation, has reorganized its Chinese team and the most capable domestic suppliers to play its cards.

For joint venture brands, this is an old tree bearing new flowers, and they have finally discovered a path to breakthrough. Meanwhile, the domestic supply chain has also produced new forces like Huawei, Momenta, and Xiaomi, which have the potential to disrupt traditional giants like Bosch, Continental, and ZF.

Behind the elephant's turn, a new era is rapidly approaching.

Leveraging Strengths

Using Lexus's product strength to compete with the prices of "alternative brands" like XPeng and Leapmotor is something the car market previously dared not imagine.

The Bozhi 7 is a standard "532" model, measuring over 5.1 meters in length, nearly 2 meters in width, and with a wheelbase stretched to 3 meters, it can almost rival the Lexus ES. Space and design are just the surface; the real highlight is the confrontation between GAC Toyota and the new forces. It no longer insists on the closed loop within the Toyota system but has opened its doors directly to the Chinese smart car supply chain.

It is reported that the Bozhi 7 is equipped with Huawei's HarmonyOS cockpit 5, addressing the long-standing criticism of joint venture car systems being "outdated"; integrating Xiaomi's hardware ecosystem is a compromise and embrace of the younger generation's digital lifestyle; and the introduction of Momenta's R6 reinforcement learning model has given GAC Toyota direct access to the industry's high-level intelligent driving ticket.

At the same time, Toyota has not given up on emphasizing mechanical quality. In terms of power, the Bozhi 7 uses Huawei's DriveONE dual-motor electric drive system; in terms of chassis, the Bozhi 7 is equipped with dual-chamber air springs and SDC shock absorbers as standard across the range, tuned by the Toyota GR and Lexus teams.

Compared to the new forces, the product strength of this sedan is already difficult to distinguish, but GAC Toyota is more ruthless than the new forces, acting as a price butcher, pulling the original 300,000-400,000 yuan D-class cars down to the 156,800-194,800 yuan range, which almost directly invades the territory of mainstream new energy brands.

It can be said that Toyota has completely torn off its conservative label and transformed into an aggressive player ready to engage in fierce competition with rivals.

In fact, this approach has already been validated with the Bozhi 3X. Public data shows that the Bozhi 3X sold over 70,000 units in its first eight months, becoming the sales champion among joint venture new energy vehicles. Against the backdrop of joint venture pure electric vehicles generally facing pressure, this achievement is a success of the Chinese side's definition and collaboration with the domestic electric vehicle supply chain.

Looking back, over the past three years, the narrative of the new energy market has been almost entirely dominated by independent brands. High computing power platforms, large-screen cockpits, urban intelligent driving, and price reductions have become the industry's main themes. Meanwhile, the labels for joint venture brands are more about "slow transformation," "long decision chains," and "shortcomings in intelligence." However, from the essence of the industry, the underlying capability of joint venture brands lies in product definition and supply chain integration.

The logic of the Platinum Smart 7 is to reorganize this capability within the Chinese context. Decision-making power is further decentralized to the Chinese team, with local R&D leading the definition of new vehicles, and the supply chain directly connecting with leading Chinese technology companies such as Huawei, Momenta, and Xiaomi.

It has been proven that the localization empowerment of the Chinese team, combined with the strong manufacturing endorsement of joint venture brands, makes this path not only feasible but also quite impactful.

Change and Constancy

It is evident that GAC Toyota is working at a rapid pace to address its shortcomings in electrification and intelligence. This urgency stems from the market realities of the past two years.

By 2025, the market share of Japanese brands in China has fallen below 10%, declining for four consecutive years, nearly halving from its peak market share of 24%. Once highly sought-after Japanese models have also fallen from grace.

According to predictions from the China Association of Automobile Manufacturers, the growth in domestic automobile market sales will be limited in 2026. In the context of a stagnant market, GAC Toyota, as a joint venture giant, has reached a critical point of needing to break the mold to establish itself. However, GAC Toyota has not blindly engaged in internal competition for this breakout battle.

Business principles demonstrate that any emerging industry, after experiencing early-stage wild growth and a frenzy of traffic, will ultimately return to system efficiency and the essence of business. The current smart electric vehicle market is at such a turning point. Faced with endless gimmicks and "pseudo-demand" driven by innovation for the sake of innovation, GAC Toyota has chosen restraint.

"We will not pursue 'pseudo-innovation' that users do not need; we will invest in high-frequency essential needs without hesitation," said Wen Dali, Executive Vice President of GAC Toyota Motor Co., Ltd., outlining GAC Toyota's path to breaking through the quagmire of internal competition.

If the Chinese definition is the starting point, then the real watershed lies in changes at the institutional level.

Sources close to GAC Toyota revealed to Wall Street News that an organizational transformation has taken place within GAC Toyota, with all employees' awareness now genuinely focused on demand. Wen Dali summarized it as "using the methodology of technology companies to carry out a transformation of the 'new car manufacturing system.'"

In fact, China has become the fastest market for the iteration of global new energy technologies. Core technologies such as batteries, electric drives, electric controls, and intelligent driving have formed a highly competitive and rapidly evolving ecosystem in China. If joint venture brands continue to adhere to a globally unified pace, they will inevitably miss the window; however, incorporating China's supply chain capabilities into their system may achieve reverse empowerment.

This involves the reconstruction of the car manufacturing methodology. GAC Toyota does not reject new things but integrates them into its own system. Wen Dali summarized it as: "Get the product right using IPD; to make the right product, rely on Toyota's on-site philosophy. The combination of the two is the Toyota flavor in the era of new energy."

IPD, originating from the agile thinking of technology companies, ensures that GAC Toyota can keenly capture market trends and avoid building cars behind closed doors; while "on-site philosophy" is the soul of Toyota's lean production, ensuring reliability.

It can be said that when joint venture brands begin to defend the traditional bottom line of car manufacturing in China’s most competitive price range, using an open supply chain combination, this counterattack is no longer just a competition in terms of sales, but a revalidation of systemic capabilities The true test of the Platinum Smart 7 lies not only in its pre-sale data but in whether it can prove that, amidst the wave of electrification and intelligence, joint venture brands can still achieve a turnaround through integration and restraint.

As Wen Dali said: "The Toyota flavor in the era of new energy is to steadfastly uphold the essence of car manufacturing amidst the noise, find the ultimate balanced solution to address all user pain points, and use the methodology of technology companies to carry out a thorough transformation of the 'new car manufacturing system.'"

This is Guangfeng's response to the industry's major changes: transformation is not about breaking everything and starting over, but about being able to recognize oneself even after breaking