Business / Auto Policy

Turning on green light for clean cars

(Agencies) Updated: 2015-12-28 10:05

China's motoring millions have so far had little truck with environmentally friendly cars that might help clear up the nation's polluted skies, much to the detriment of Toyota Motor Corp's lineup of hybrid cars, but that situation may soon change as some cities start offering incentives to buyers.

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. These lotteries are routinely undersubscribed. Getting a plate for a gas engine-powered car is far more difficult. 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." Under the new arrangement in Tianjin and Guangzhou, Toyota's newest China models will get a marketing edge as the Japanese carmaker plays catch-up with Volkswagen AG and General Motors Co in the world's largest auto market. Toyota agreed to localize development and production of hybrid car components after almost two decades of keeping the work contained to Japan.

With Tianjin and Guangzhou getting behind the Corolla and Levin hybrids, Toyota received orders for 8,000 units in the three weeks after their introduction in late October. That level of hybrid demand is unprecedented for the carmaker, which first introduced the gasoline-electric Prius to the China market in 2005.

"Toyota has taken 10 years to sharpen a sword," Hiroji Onishi, Toyota's chief executive officer for the China region, said last month at the Guangzhou Motor Show. "This year marks the start of a hybrid era in China."

Guangzhou's hybrid support was a deciding factor for Jason Chen, a 35-year-old city resident, who's placed an order for a 150,000 yuan ($23,400) Levin hybrid. "I like the car's fuel efficiency and exterior design, but what really convinced me is the dealer said I can get a free number plate," he said by phone. 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.

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