Toyota to produce more hybrid vehicle parts in China
Toyota Motor Corp. wants locally procured parts to make up at least half the components in the gasoline-electric hybrid propulsion systems for the Corolla and Levin cars it plans to start making in China next year.
Shinichi Matsumoto, Vice President for Toyota Motor Engineering & Manufacturing in China, said Toyota needs more local content in order to reduce hybrid prices.
Toyota currently pays costly tariffs to import key components from Japan to assemble hybrid vehicles in China. The automaker aims to slash costs by using many locally procured parts, Matsumoto told reporters on Tuesday.
"My feeling is that unless the local procurement ratio reaches 50 percent, we can't call it 'localized'," he said at a research and development centre in Changshu, about 80 kilometers west of Shanghai. "Ultimately, our goal is to localize 100 percent."
Matsumoto also said that Toyota will ensure that the quality of parts produced in China will equal the quality of parts made Japan.
Toyota said this week that it will start manufacturing and selling Corolla and Levin sedans for China in 2015 with a locally made hybrid system including the battery and the motor. This would be the first time it will make hybrids outside of Japan using key components procured locally.
Made-in-China components do not necessarily mean made-by-Chinese companies. Much of the output will come from Chinese factories run by Japanese suppliers, Matsumoto said.
But Toyota is procuring parts from several Chinese companies, he said.
Toyota, which already assembles the Prius and Camry hybrids in China with component and system kits brought in from Japan, said it is trying to educate Chinese customers about hybrid technology. For instance, some people think they must be re-charged like electric vehicles, which is not the case.
While Toyota is not the only firm trying to localize production of the hybrid system, it is the furthest ahead.
Honda Motor Co. also wants to procure key components such as motors and lithium-ion batteries in China, said Takahiro Hachigo, an executive at Honda's Chinese operations, said in a news conference in Beijing on Sunday. The firm plans to start making hybrid cars in China by 2016.
"As corporate average fuel emission standards get stricter, we believe that hybrids will become the mainstream among green cars," Seiji Kuraishi, Honda's chief operating officer for the China region, told the same news conference.
In Japan, the Prius has a starting price of $20,500 (128,000 yuan) before subsidies. In China, the car starts at $36,900.
Toyota said on Tuesday that it sold 26,800 hybrid vehicles in China in 2013, up 55 percent from a year earlier. It has not said how many hybrids it aims to sell in China in the future.
Toyota currently pays costly tariffs to import key components from Japan to assemble hybrid vehicles in China. The automaker aims to slash costs by using many locally procured parts, Matsumoto told reporters on Tuesday.
"My feeling is that unless the local procurement ratio reaches 50 percent, we can't call it 'localized'," he said at a research and development centre in Changshu, about 80 kilometers west of Shanghai. "Ultimately, our goal is to localize 100 percent."
Matsumoto also said that Toyota will ensure that the quality of parts produced in China will equal the quality of parts made Japan.
Toyota said this week that it will start manufacturing and selling Corolla and Levin sedans for China in 2015 with a locally made hybrid system including the battery and the motor. This would be the first time it will make hybrids outside of Japan using key components procured locally.
Made-in-China components do not necessarily mean made-by-Chinese companies. Much of the output will come from Chinese factories run by Japanese suppliers, Matsumoto said.
But Toyota is procuring parts from several Chinese companies, he said.
Toyota, which already assembles the Prius and Camry hybrids in China with component and system kits brought in from Japan, said it is trying to educate Chinese customers about hybrid technology. For instance, some people think they must be re-charged like electric vehicles, which is not the case.
While Toyota is not the only firm trying to localize production of the hybrid system, it is the furthest ahead.
Honda Motor Co. also wants to procure key components such as motors and lithium-ion batteries in China, said Takahiro Hachigo, an executive at Honda's Chinese operations, said in a news conference in Beijing on Sunday. The firm plans to start making hybrid cars in China by 2016.
"As corporate average fuel emission standards get stricter, we believe that hybrids will become the mainstream among green cars," Seiji Kuraishi, Honda's chief operating officer for the China region, told the same news conference.
In Japan, the Prius has a starting price of $20,500 (128,000 yuan) before subsidies. In China, the car starts at $36,900.
Toyota said on Tuesday that it sold 26,800 hybrid vehicles in China in 2013, up 55 percent from a year earlier. It has not said how many hybrids it aims to sell in China in the future.
