Toyota to make batteries in China for petrol-electric hybrid cars

Toyota Motor is moving to set up a joint venture on the mainland with a local firm to produce batteries for the country's fledgling petrol-electric hybrid car market, a Beijing-based Toyota spokesman said.

Takanori Yokoi, said the Japanese carmaker is in discussions with Hunan Corun New Energy of Hunan province to jointly produce nickel metal hydride batteries for hybrid models Toyota plans to start selling in the mainland in about 2015.

Toyota previously said it was working to design key hybrid components on the mainland to make mainland-only hybrid models more affordable.

The move comes as Toyota and other carmakers on the mainland - domestic and foreign - gear up to try to kick-start sales of hybrid cars in anticipation of changes in the country's policy aimed at nurturing demand for "new energy" cars to include conventional hybrids.

Under the existing policy, Beijing provides generous subsidies for private purchases of all-electric battery vehicles and heavily electrified "near all-electric" plug-in hybrids, but only limited support for conventional petrol-electric hybrids.

A number of industry insiders and experts believe the government will boost purchase subsidies significantly for conventional hybrids as early as this year.