Photo/IllutrationToyota Motor Corp. President Akio Toyoda, center, shows off a car to Chinese Premier Li Keqiang during a tour of the automaker’s plant in Tomakomai, Hokkaido, on May 11. Prime Minister Shinzo Abe is seen on the left. (Asahi Shimbun file photo)

NAGOYA--Toyota Motor Corp. plans to increase production in China by 20 percent by constructing new assembly lines at its plants there to meet rising demand for electric vehicles and plug-in hybrids, sources said.

The move is designed to tailor its output to the new Chinese regulation that requires large automakers operating in the country to make certain percentages of their cars built or imported there “new energy” vehicles such as EVs, plug-in hybrids and fuel cell cars. The rule will take effect in 2019.

Toyota’s expansion is also aimed at grabbing a larger share of the Chinese market, the world’s largest with nearly 30 million vehicles sold annually, as the carmaker trails Volkswagen AG and General Motors Co. in unit sales.

Production will be expanded at Toyota’s plants in Tianjin and Guangzhou, according to the sources.

The Tianjin plant, a joint venture with leading local automaker First Automobile Works, has the capacity to roll out 510,000 units annually.

Toyota will spend about 28 billion yen ($253 million) on the construction of new assembly lines there, which will manufacture 10,000 units of EVs and 110,000 units of plug-in hybrids.

The Guangzhou plant, a joint venture with Guangzhou Automobile Group Co., can currently build 500,000 units annually.

If the size of the planned expansion at the Guangzhou plant is similar to that at the Tianjin plant, Toyota’s ability to build vehicles in China will grow by 20 percent to 1.4 million units annually.

In 2017, Toyota’s unit sales in China came to 1.29 million, lagging far behind Volkswagen, which boasted more than 4 million, and GM.

When Toyota President Akio Toyoda accompanied Chinese Premier Li Keqiang on his visit to the automaker's factory in Hokkaido in May, Toyoda said, “We will do our best to catch up in China, which is the world’s fastest-growing economy.”

Soon after, the carmaker announced organizational restructuring centering on its strategy toward the Chinese operation.

Earlier this month, Toyota conveyed its determination to bolster Chinese production to its group companies by “doing by whatever means available to increase the number.”

(This article was written by Sho Hatsumi and Tomohiro Yamamoto.)