Toyota Delays Production of Third Generation Prius in China

According to sources within FAW-Toyota, the joint venture is still in the stage of assessing production and marketing challenges and has no timetable set for introducing the third generation Prius, abandoning a previous plan to begin production this year.

From 2005 to 2009, FAW-Toyota had built the second generation Prius in Changchun of Northeast China. High-priced (starting at 259,000 yuan, or $39,000) and receiving no government subsidies, the hybrid delivered only about 3,700 units in China in four years, while sales worldwide has topped 1.8 million (as of June 2010) since its launch in 1997.

The third generation, released in Japan in May 2009, made its Chinese premiere at 2009 Beijing Auto Show. Chinese production had been projected to start in March and then the second half of this year.

As we have previously reported, the new Prius, a non-plug-in with a 1.8-liter gasoline engine, is barred from receiving China’s green car subsidies, which go only to models with engine displacements smaller than 1.6 liter and plug-in hybrid or pure electric models. Thus, it would be no less affordable and unlikely attract ordinary car shoppers.

Besides pricing, Toyota seems also worried about losing its hybrid tech secrets. An official of FAW-Toyota has recently been quoted as saying, "Certain government agencies have requested detailed information about the third generation Prius, while Toyota has been reluctant to disclose key data." This agrees with media reports that the Chinese government is forcing foreign automakers to give up their clean fuel secrets.