Toyota Motor has broken ground for a US$689m technical centre near Shanghai that will, among other activities, prepare for shifting production to China of tightly guarded green car technology – key components used to make its fuel-efficient hybrids and other alternative-energy vehicles.
The Wall Street Journal said the move came ahead of expected new rules from the Chinese government that will likely stipulate that global automakers expecting to sell green cars in China must make certain key components there. It comes as part of Toyota’s effort to resume production and sales of the Prius hybrid car in China which Toyota stopped assembling there in 2009 due to falling demand, and come up with hybrid variants for the world’s biggest market, two individuals familiar with the move told the WSJ.
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Initial Prius assembly work in China, which may start as early as next year and will involve mostly finished components brought in from Japan, will be less technologically sophisticated than the manufacturing of individual parts and systems. But the opening of the Shanghai technical centre signals that Toyota is prepared to do much technically advanced work eventually in China – even though company officials have cautioned that its most cutting-edge technologies will still be developed and produced elsewhere.
Toyota never sold the current Prius in China, in part because of fear over losing the technical expertise that went into designing the car to its joint venture partners in China.
But now, with rivals including General Motors committing to producing electric and hybrid cars in China in part to showcase their willingness to share “new energy” vehicle technology with China, Toyota also has decided to produce the current-generation Prius in China – and manufacture key components eventually to produce the car, such as powerful electric motors and advanced batteries, locally.
It also aims to conduct new-energy vehicle research and development at the new tech center in Changshu, a city just northwest of Shanghai. Toyota said the Changshu technical centre is scheduled to open in 2013.
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By GlobalDataToyota’s global president and chief executive, Akio Toyoda, who was in Changshu, said Toyota plans to begin production of key hybrid-car components in China as early as 2015.
“If there is anything Toyota can do for China now, that has to be our hybrid and related plug-in technology,” he said during the groundbreaking ceremony.
China’s new rules regarding green-car technology have yet to be announced, but industry executives say China is likely to require foreign automakers aiming to produce and sell green cars in China to form joint ventures controlled by local companies. They have led to worries among foreign automakers that China’s auto manufacturers could get access to their most cutting-edge technology.
Even as Toyota touted its willingness to transfer advanced green-car technology to its joint-venture partners in China, the individuals familiar with the matter told the WSJ Toyota is unlikely to share most advanced technology.
Toyota will meet Chinese government requirements halfway. For example, the Prius model and its key components the company is looking to produce in China are already more than two years old. The knowledgeable individuals said that the company is unlikely to share with China core technology the company is developing for the next-generation Prius, due out in a few years.
Toyota said over the weekend that it plans to sell some of its most cutting-edge green cars – a plug-in electric-gas hybrid and an all-electric car – in China starting in 2013. Those cars, however, will be brought in from Japan for sale there, thereby keeping its key know-how for those vehicles from leaking out in China.
