JAPAN'S Toyota Motor Corp. said Thursday (Dec 15) it began production of the Prius hybrid car in China with local joint venture partner FAW Group as planned, with an aim to sell 3,000 units in 2006.

The move marks a significant first step in Toyota's aim to promote the gasoline-electric vehicles in China, one of the world's biggest and fastest-growing car markets, as it aims to make hybrids a global standard for fuel-efficient vehicles.

It could also help China deal with pollution and energy shortage problems, which it fears could slam the brakes on economic growth. Hybrids burn less fuel by adding one or more electric motors to a standard petrol or diesel engine.

"In addition to China's new automobile policy that encourages the use of hybrid vehicles, the introduction of emission regulations on par with those in Europe and the United States is also moving forward," Toyota quoted executive vice president Yoshimi Inaba as saying during a ceremony at the plant in Changchun, northeastern China.

"It is my strong wish that the Prius built here in Changchun will contribute to the widespread use of hybrid vehicles in China," he said. The production marks the first time the popular sedan will be assembled outside Japan.

A few months ago, Volkswagen AG and General Motors Corp. also announced plans to explore building hybrids in China with their local partners.

The Chinese-built Prius will be priced between 288,000 yuan and 302,000 yuan (US$35,680-US$37,410), compared with around US$22,000 in Japan and North America.

Toyota and FAW, Japan's and China's top automakers, had agreed in 2004 to assemble the Prius in Changchun by the end of this year with complete knock-down kits imported from Japan.

The China joint venture plant, Sichuan FAW Toyota Motor Co., held 50 percent each by FAW and Toyota, also builds the Land Cruiser sport utility vehicle at the Changchun site.

Editor: Wing