More Toyota hybrids for China

Posted by: Ian Rowley on June 30, 2008

For all Toyota’s recent success in China, it’s fair to say the Prius isn’t one of them. While Americans can’t get enough of the gas-electric hybrid, Chinese sales, stymied by high import taxes, have disappointed. Launched in 2005, last year Toyota’s China Prius sales were just 1,000—one third of what had been hoped. At around $36,000—around $15,000 more than the U.S.—it’s easy to spot the cause.

Still, there are fresh signs that Toyota’s plans to ramp up hybrid sales to over one million a year globally by the early 2010s include China. According to reports in Japan today, Toyota will start making hybrid Camrys in China in 2010. Initially, Toyota will make 10,000 of the cars a year at Guangzhou Toyota, its joint venture with Guangzhou Automobile Group in Guangdong, notes today’s Nikkei. That echoes recent announcements that Toyota will start producing Camry hybrids in Australia and Thailand. Toyota expects to benefit as gas prices rise in China and plans by Chinese authorities to give preferential treatment to cleaner cars in the world’s second biggest automarket.

Reader Comments

Snoz

July 2, 2008 5:32 AM

To protect its auto manufacturing business, socialist Italy imposed stiff import car tax since the end of WW2. The result is legendary: Fiat, AlphaRomero, and Lancia all made over-priced, trashy cars and were summarily booted from USA market. Only the terms of EU membership forced Italy to slowly decommission its stiff custom tax on import cars. Foolishly, China is adopting the obsolete Italian import car tax. China's rationale is simply: with a huge local population in need of employment, encouraging car factories in China is a no-brainer. Unfortunately, China will repeat the same lesson that punished the Italian auto makers.

GUs

July 3, 2008 2:40 AM

Snoz,
Chinese import tariffs actually came down in recent years as a condition of WTO membership. On top of that, the Chinese auto market is probably the most competitive in the world right now. All the world's players are there, even more than in the US. I think if you are comparing China with Italy, then you're comparing apples and oranges.

Snoz

July 3, 2008 6:34 AM

GUs,
While there are many auto companies in China, the chinese government do not like foreign car companies to compete with or own their domestic car companies. Hence, GM, Toyota, VW, and etc, etc are all in some sort of partnership with chinese auto companies. Also, while China may have more of the world's auto players, that does not ensure competitiveness. Currently, China's auto production is geared more for domestic consumption than as export as is the case for Japan. China imposes heavy customs on imported cars as a measure to encourage the construction of car factory in China in order to employ its sizable and available labor force. Socialist Italy imposed heavy customs on imported cars to protect its labor union contracts. The same end result: stymied competition and its long term economic consequences. Weighing the benefit of higher employment versus more competition, the chinese government made a public policy choice based on its assessment of what's good for its people. China has the absolute right to do so. However, the same economic "apples and oranges" forces are in China as in Italy as in USA and elsewhere.

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