Automotive News Europe — 2023-11-07
Automotive Industry
For its first plug-in hybrid production site in its Europe region, Toyota has turned to its factory here in Sakarya, about 150 km east of Istanbul, where it has just started building the second-generation C-HR compact SUV.
Toyota has invested €308 m ($329 m) in the plant for the project, including building a battery assembly area for plug-in hybrid versions of the C-HR, which is expected to help the model reach a higher sales target and better compete against Europe's compact SUV leader, the Volkswagen Tiguan.
Production of full-hybrid models officially started on Saturday, when Turkish government officials and Toyota executives and employees gathered in Sakarya for a ribbon-cutting ceremony. Plug-in hybrid production starts in January.
Inside the 1 m-square-meter Toyota Motor Manufacturing Turkey factory, the first new C-HRs were already rolling off the line, and pre-production battery packs were being assembled in the new "clean room" facility.
Much of the assembly work on the 13.6-kilowatt-hour packs is done by hand, in contrast to the highly automated main production line, which next year will produce about 80,000 Corolla compact sedans in addition to 140,000 C-HRs.
The battery line has a capacity of 75,000 units. There, workers and machines assemble cells from Japan and China into three "stacks," which are joined to form a complete pack, with cooling system, case and power electronics.
There are 14 separate processes, each of which takes no more than 230 seconds, and a complete battery can be built in about 56 minutes, Toyota officials said.
Along the line, cameras with AI technology document the process, providing a record of each battery in the event of a problem.
The plug-in variant, with WLTP emissions of 19 grams of CO2 per km, is a first for the C-HR, which was first launched in late 2016. The car, with its distinctive sports coupe-like styling, has been a sales hit for Toyota in Europe, where annual sales remain close to 100,000 even at the end of its life cycle.
The second-generation Toyota C-HR is even more Europe-focused than the first model, which was sold in North America as well as Asian and Eurasian markets.
Even though the new C-HR won’t be sold in the US – where the Corolla Cross will carry the compact SUV mantle -- Toyota plans to increase annual production by about 10%, to 140,000 units annually.
Higher sales will be driven by two factors, Yoshihiro Nakata, president of Toyota Motor Europe, and Matthew Harrison, TME’s chief operating officer, said in an interview with Automotive News Europe at the factory.
For one, the plug-in variant broadens the scope of potential customers because the drivetrain is popular among business and fleet buyers where plug-ins qualify for tax breaks. Other options are a 1.8-liter full hybrid, a 2.0-liter full hybrid, and a 2.0-liter full hybrid with all-wheel drive.
Harrison said that the compact SUV segment has grown in volume since the C-HR debuted in 2016 amd even though there are more entrants now, Toyota believes the second generation will see a sales bump.
"We had double-digit segment share early in the C-HR’s life, so in reality we’ve lowered our segment share target," he said. "The segment is bigger so it will lead to a volume that’s a little bit higher" for the C-HR. Some of those new customers will be conquests from other brands, Harrison said, adding that the first generation had the highest percentage of conquests among Toyota models for several years after its launch.
Toshio Kanei, the chief engineer for the C-HR, said the latest full-hybrid system uses lighter components to improve driving dynamics, and to allow more features in the car without adding weight.
As a model designed and developed in Europe, the new C-HR caters to European customers’ tastes in several ways, Kanei and Harrison said. Kanei, a chassis engineer, pushed to "harmonize" the handling with the C-HR’s dynamic interior and exterior styling to make it more sophisticated. Rear door glass was increased to improve visibility for rear-seat passengers.
The C-HR gives Toyota three plug-in hybrid models in Europe, along with the Prius compact sedan and RAV4 midsize SUV. Nakata and Harrison said plug-in hybrids will probably make up about 5% of the brand’s sales in its Europe region, with a goal of about 20% for the C-HR.
That figure is not certain to be reached in 2024, however, because of continuing battery-cell shortages from Chinese suppliers, Harrison and Nakata said. "Our longest waiting times have been for the Lexus NX and RAV4 plug-ins, and we expect a similar situation in 2024 with the C-HR," Harrison said. "We have a demand-ahead-of-supply situation."
Nakata said he expected the supply issue to ease somewhat over the next year.
Harrison said there was a "negative sentiment" around plug-in hybrids in some markets where incentives have been pulled back because customers were not diligent about keeping them fully charged, negating much of the powertrain’s emissions benefits.
"As a transition technology, it’s very strong, even without incentives," he said. Toyota is seeking to ensure that plug-in hybrids are used in the most efficient way, including with a navigation feature that recognizes zero-emission or ultra-low-emission zones along a journey and preserves battery power for them.
Taking a broader view, Harrison said Toyota dealers are most concerned with giving customers the best drivetrain technology for their driving habits.
"We don’t mind if they buy a hybrid, or a plug-in, or an EV. Ultimately it’s our job to supply a product that meets their needs," he said.