Toyota will start producing key components for hybrid vehicles made in China as early as 2013 in the hope of reducing costs and lowering the retail price of its hybrid cars in China.
In the past, efforts to sell Toyota hybrids in China were hampered by high import duties and logistics costs on parts imported from Japan for final assembly in China (under a previous JV with FAW). Analysts say that made the cars as expensive as luxury cars and held Prius sales back for years.
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However, the Nikkei reports that China will be the first foreign country where the Japanese carmaker will set up full-scale production for the Prius with high local content. Toyota will focus on a low retail price point for Chinese consumers and is to start making Prius hybrids again in China next year.
The report says that the local production of key components is also aimed at securing a stable supply of rare-earth metals for the batteries and motors used in hybrids and EVs.
Toyota also hopes that establishing full-scale production of the Prius in China will help it stay on the authorities’ good side, the report adds.
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