Two Chinese cities to support hybrid cars, with Toyota waiting to profit image

Tianjin and Guangzhou, homes to Toyota’s local joint ventures, are becoming the first cities to let buyers of new Levin and Corolla hybrids enter the license plates lotteries usually restricted to plug-in cars.

The Chinese authorities are finally pushing hard to reduce as much as possible the alarming pollution levels across the heavily populated cities. The Government has decided a month ago to approve production permits for more than ten companies that have applied for the manufacturing licenses for the production of electric vehicles, as part of a wider plan to encourage the emission-free technologies in the country. But hybrid cars were not on the authorities’ agenda until now. Tianjin and Guangzhou, home to Toyota’s local joint ventures, are becoming the first cities to let buyers of new Levin and Corolla hybrids enter lotteries usually restricted to plug-in cars, virtually guaranteeing access to coveted new license plates. The cities are rewarding Toyota for sharing some hybrid technology and know-how with local partners.

More Chinese cities are adopting the plate restrictions to control the number of autos on their roads and promote greener cars. Getting a plate for a gas engine-powered car is a difficult task, in Beijing, for example, a consumer has 0.5 percent chance of winning a plate in lotteries held every two months. “Toyota has done its part to localize production and lower costs,” said Zhang Yi, a Tokyo-based auto industry consultant at Nomura Research Institute. “The government support is the last step they need to reverse hybrid’s fate in China.” Toyota agreed to localize development and production of hybrid car components after almost two decades of keeping the work contained to Japan.

Toyota is negotiating for more cities to offer hybrids support similar to what the government offers for new-energy vehicles, said Jiang Jun, president of FAW Toyota Motor Sales Co. “It’s been proven that years of lobbying the central government won’t work,” said Zhang, of Nomura Research. “Cracking open local cities one by one should be a better strategy.”

Via Bloomberg