Toyota is planning to manufacture key components for its hybrid cars outside Japan for the first time, in a bid to boost sales.
It will start making parts at its research and development facility in China to cater to growing demand from the mainland.
China is one of the world’s biggest polluters but sales of hybrid vehicles are expected to grow steadily in coming years.
Toyota is the world’s biggest carmaker.
“Everybody recognises that China is going to be a very important market for all car manufacturers,” Paul Nolsco, a spokesperson for Toyota, told the BBC.
“Given the scale that we hope to achieve in China, it makes more financial sense to make these parts there”, he added.
The company said it is likely to manufacture electric motors and batteries at its Chinese facility, but a final decision was yet to be made.
‘More affordable’
China was also the first country outside Japan where Toyota started to assemble and produce its Prius hybrid cars.
However, the key components for those cars were manufactured in Toyota’s Japanese factories and then sent over to the assembly lines in China.
Analysts said that had pushed up sale prices in China.
“That car basically flopped as the parts were too expensive,” said Christopher Ritcher of CLSA Asia-Pacific Markets. The Chinese production of the Prius was eventually suspended by the company.
Mr Ritcher said Toyota’s decision to shift the manufacture of these parts to China would result in cheaper parts and eventually translate into better sales.
“By making hybrids more affordable they can try and capture some of the market share and make this an attractive concept for consumers,” he said.
