Toyota Motor Engineering and Manufacturing (China) R&D Center President Tadashi Yamashina announced that the manufacturer will begin manufacturing key auto parts next year in the country, in preparation for upcoming domestic production of its hybrid automobile models, the Beijing Times reported today. The news comes not long after FAW Toyota has begun Chinese sales of the new generation Prius hybrid.

Mr. Yamashina, a former member of Toyota's Technical Administration Group, was assigned to lead the Chinese R&D center last October. The new center, located in Changshu, Jiangsu, will focus on the development of hybrid and other electric vehicle technology in China. "At soonest, [we] hope that production of hybrid power system parts will begin somewhere in the country in 2013," Mr. Yamashina said. By producing the necessary auto parts, including batteries, engines, inverters and transmission systems, in the country, Toyota hopes to cut down on costs for its hybrid vehicles. If everything goes according to schedule, Toyota will begin Chinese manufacture of hybrids by 2015.

Although Toyota's hybrids have been well-received worldwide with sales exceeding three million, they have not been especially popular in China. Their relatively high price has often been cited as a factor to their dull performance. For example, although the new Prius' (pictured) Chinese price tag of 229,800 yuan ($36,508) is a full 30,000 yuan ($4,766) lower than the previous generation, it is still far more expensive than it is in the US or Japan, where its asking price is 180,000 yuan ($28,601) and 150,000 yuan ($23,834), respectively. Toyota explains that the price is due to the fact that about 99 percent of the Prius' auto parts are imported, which results in increased taxes and production costs. Mr. Yamashina admits that if the Prius can't be bought by ordinary consumers, it will lose much of its pioneering significance. He emphasizes that Toyota is committed to domestic production of the car.