Toyota plans to produce 10,000 Camry Hybrids on the plant’s new second line, due to go operational in 2009. The factory will first produce the gasoline-powered Camry, with the hybrid version following. Key components will be imported from Japan.

Toyota has been making and selling the Prius hybrid in China since 2005, but 2007 sales stalled at around 1,000, or one-third of its target. The firm aims to retrench with a new offering, hoping to parlay the Camry's strong brand name into substantial hybrid sales. Some 170,000 of the gasoline-powered models sold in 2007.

The Chinese government recently hiked gasoline prices in response to the run-up in crude oil and is considering giving preferential tax treatment to eco-friendly cars. Eyeing these changes, Toyota plans to add production capacity of hybrid cars as part of its drive to double Chinese sales from 2007’s level to more than 1 million vehicles annually by the start of the next decade.