Japan's largest automaker Toyota Motor has reached an agreement with China's First Auto Works Group to jointly produce the popular Prius hybrid sedan by the end of next year.

The move marks the first overseas production of the hybrid vehicle, which runs on electricity and gasoline.

Toyota will adopt the knocked-down method of locally assembling auto parts shipped from Japan, while offering technical aid to First Auto Works or FAW.

Under the agreement, the two companies will also consider the future possibility of an FAW-brand hybrid vehicle featuring lower levels of fuel consumption.

Toyota's eco-friendly vehicle strategy in China comes after Beijing issued new automobile policy in June, supporting the development of next-generation hybrid and other environmentally conscious cars.

(CRI.com September 15, 2004)