Toyota is to make hybrid drivetrain parts outside Japan for the first time.

The automaker told AFP at the weekend it would make the Prius hybrid and its key parts in China in a bid to boost sales in the world's largest car market.

This would be the first time Toyota has produced key components such as motors and batteries for the petrol-electric hybrid in a facility outside Japan.

Toyota assembled the second generation Prius in China, with key components shipped in kits from Japan but stopped production in 2009.

"The company has a business policy to expand sales of environmentally friendly cars in China," Toyota spokeswoman Shiori Hashimoto told AFP, adding production of the car in the country had been approved by Chinese authorities.

The Nikkei business daily reported that production of the third generation was set to begin in China at 2012 at the earliest.

The Nikkei said it would be a joint venture with China FAW Group.

The car's major components will be produced at the company's research and development facility in Changshu, in eastern China, but the Toyota spokeswoman would not say where in China the car would be assembled.

Toyota would also not disclose which parts would be made in China.

Volkswagen and General Motors plan to produce environmentally friendly vehicles in China, but are reluctant to talk about local production of key parts due to concerns over technology leaks, the Nikkei said.