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Why Toyota only sold one Prius in China last December

Markets2017-02-16

If you’re reading this in China and you bought a Prius in December, congratulations -- you were the only one.While Toyota Motor Corp.’s iconic gas-electric hybrid car continues to sell in other markets almost two decades after the first one was sold in Japan in late 1997, Chinese consumers have never warmed to the Prius, a mainstay of the U.S. green-car movement. This past year, sales almost completely flatlined, even as China’s cities continue to battle smog issues.One Prius was sold in the country in December, the first sale since May. In total, Toyota sold 76 Priuses in China last year, compared with about 700 in 2015, according to dealer data compiled by Bloomberg Intelligence.“As far as the Chinese are concerned, it just doesn’t look very good,” said Steve Man, an automobile and industrial sector analyst with Bloomberg Intelligence in Hong Kong.Man said the Prius is a unique car that stands on its own and doesn’t fit into any familiar categories for consumers in China. As a result, its sales have been undercut by Toyota’s far more popular Corolla and Camry models, which have a reputation for being high-quality vehicles among consumers there, he said. A shift in Chinese tastes away from sedans and toward more spacious sport utility vehicles hasn’t helped either.“Corolla and Camry are one of the most popular models in China, so a lot of the Chinese can relate to them,” Man said. “For a similar price, they would opt to buy the Corolla and the Camry for the strong brand recognition they have.”Toyota also markets gas-electric hybrid versions of these models in China. The company sold almost 47,000 Corolla and Camry hybrids last year, making up 65 percent of its total Chinese hybrid sales, the data show. In all, Toyota sold a record 71,676 gas-electric hybrids in China in 2016, an eightfold jump from the previous year and at least the eighth straight annual increase, according to data compiled by Bloomberg.Import TaxToyota stopped producing the Prius in China in 2015, which means buyers of the cars are subject to the 25 percent customs tax slapped on imports. An imported Prius hybrid starts from 229,800 yuan ($33,455) to 269,800 yuan. For a similar price, you can buy an Audi Q3 SUV.Toyota’s new Prius plug-in hybrid vehicles (PHV). Photo: Tomohiro Ohsumi/BloombergToyota began selling its new Prius plug-in hybrid, or PHV, in Japan this week, and plans to start sales in Europe in March. The company doesn’t intend to market the model in China.“We’ve only just started production of hybrid vehicles in China, so we’re making the utmost effort to popularize those vehicles,” Toyota Chairman Takeshi Uchiyamada said at a Prius event in Tokyo Wednesday. “When the timing is right, we will consider introducing the PHV in China.”(Bloomberg)

If you’re reading this in China and you bought a Prius in December, congratulations -- you were the only one.

While Toyota Motor Corp.’s iconic gas-electric hybrid car continues to sell in other markets almost two decades after the first one was sold in Japan in late 1997, Chinese consumers have never warmed to the Prius, a mainstay of the U.S. green-car movement. This past year, sales almost completely flatlined, even as China’s cities continue to battle smog issues.

One Prius was sold in the country in December, the first sale since May. In total, Toyota sold 76 Priuses in China last year, compared with about 700 in 2015, according to dealer data compiled by Bloomberg Intelligence.

“As far as the Chinese are concerned, it just doesn’t look very good,” said Steve Man, an automobile and industrial sector analyst with Bloomberg Intelligence in Hong Kong.

Man said the Prius is a unique car that stands on its own and doesn’t fit into any familiar categories for consumers in China. As a result, its sales have been undercut by Toyota’s far more popular Corolla and Camry models, which have a reputation for being high-quality vehicles among consumers there, he said. A shift in Chinese tastes away from sedans and toward more spacious sport utility vehicles hasn’t helped either.

“Corolla and Camry are one of the most popular models in China, so a lot of the Chinese can relate to them,” Man said. “For a similar price, they would opt to buy the Corolla and the Camry for the strong brand recognition they have.”

Toyota also markets gas-electric hybrid versions of these models in China. The company sold almost 47,000 Corolla and Camry hybrids last year, making up 65 percent of its total Chinese hybrid sales, the data show. In all, Toyota sold a record 71,676 gas-electric hybrids in China in 2016, an eightfold jump from the previous year and at least the eighth straight annual increase, according to data compiled by Bloomberg.

Import Tax

Toyota stopped producing the Prius in China in 2015, which means buyers of the cars are subject to the 25 percent customs tax slapped on imports. An imported Prius hybrid starts from 229,800 yuan ($33,455) to 269,800 yuan. For a similar price, you can buy an Audi Q3 SUV.

Toyota’s new Prius plug-in hybrid vehicles (PHV). Photo: Tomohiro Ohsumi/Bloomberg

Toyota began selling its new Prius plug-in hybrid, or PHV, in Japan this week, and plans to start sales in Europe in March. The company doesn’t intend to market the model in China.

“We’ve only just started production of hybrid vehicles in China, so we’re making the utmost effort to popularize those vehicles,” Toyota Chairman Takeshi Uchiyamada said at a Prius event in Tokyo Wednesday. “When the timing is right, we will consider introducing the PHV in China.”

(Bloomberg)

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