Toyota to develop hybrid parts in China 0

Toyota hybrid cars destined for China will now have their parts manufactured the country. For the first time ever, development of such parts is being transferred overseas in order to increase sales.

Great potential in China

The world’s biggest car maker is taking advantage of the demand for hybrid cars in China. It is potentially the most profitable automotive market in the world in relation to the hybrid car market. Why? They country is near the top for emitting the most C02 emissions from cars and creating pollution. The demand is bigger than ever before.

Paul Nolsco, a Toyota spokesman, said that the project was more feasible if Toyota hybrid parts were to be developed in China. He said “Given the scale that we hope to achieve in China, it makes more financial sense to make these parts there,”

He also said that he expects all car manufactures to make the most out of the potential in the Chinese car market. He was quoted to have said “Everybody recognises that China is going to be a very important market for all car manufacturers,”

Materials easy to access in China

It would appear that market potential isn’t the only reason behind Toyota’s decision. It would be a lot easier to access hybrid materials needed to create the necessary parts. China has these sorts of materials in abundance, and also imposes a very strict exportation rule meaning such materials wouldn’t be as easily available in Japan.

Earthquakes and Tsunami’s won’t hold Toyota

Earlier this year the horrendous Japanese Earthquake and Tsunami caused severe disruption for Toyota’s business across the world. In order to avoid such drastic consequences of natural disasters occurring again, the expansion to its Chinese facilities seems like a sensible move.

Vivek Vaidya of Frost & Sullivan echoed this by saying “In case of any natural disasters, they want to ensure the supply chain remains de-risked and continued supplies are available to the factories,”

Localised products

Vaidya also said that the business could be trying to localise their products in bid to get more personal with customers. He was quoted to have said “You may see them doing this more and more, getting closer to their end markets and customers,”

Toyota Prius impact

The decision to create Toyota Hybrid car parts in China came about as the Toyota Prius flopped in China. Despite being an immensely popular vehicle in other parts of the world including the UK, various components of the car were developed in Japan and sent to China. This pushed the value of the car up leaving the vehicle too pricey for customers.

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