Toyota planning to push Prius into China

Toyota is to start selling its third-generation Prius hybrid cars in China next year, company executives said this week. The car could go on sale as early as March, according to a report in the Wall Street Journal.

The previous version of Toyota's hybrid fuel-efficient vehicle went on sale in China in 2005 though sales since have been disappointing with only 550 sold last year, in part because of the high price tag due to import taxes.

The first third-generation Toyota Prius vehicles were launched earlier this year and went on sale in the UK this week.

The firm said it will also start selling a new hybrid car in 2011 that is more fuel efficient than the Prius, according to Japanese newspaper Yomiuri.

The car will be based on Toyota's Vitz compact car and is expected to have fuel economy of more than 40km per litre, which is an improvement on the 38km per litre boasted by the third-generation Prius.

The car will be sold in Japan, Europe and the US and will have a price tag of about 1.5 million yen ($15,600, £9,400), making it significantly cheaper than the Prius which retails at around $25,000.

Toyota has sold more than 1.25 million Prius's since its launch in 1997, making it the world's most popular hybrid, but the company is now engaged in a fierce battle to retain its leadership position as rival automakers such as Honda and General Motors have brought out new hybrids in an attempt to challenge its dominance of the market.