Toyota denies Prius government funding report

updated 4:58 p.m. ET April 2, 2008

TOKYO - Toyota Motor Corp. denied on Wednesday it had received any funding from the Japanese government to develop its hit Prius gas-electric hybrid car.

Japan’s top automaker rejected a March 24 Business Week report that quoted Jim Press, vice chairman and president of Chrysler LLC and a former board member at Toyota, as saying, “The Japanese government paid for 100 percent of the development of the battery and hybrid system that went into the Toyota Prius.”

Press worked for 37 years at Toyota, including the years of research for the Prius, which sent on sale 10 years ago. He left Toyota for Chrysler last September.

Toyota said the report was untrue.

“I can say 100 percent that Toyota received absolutely no support — no money, no grants — from the Japanese government for the development of the Prius,” Toyota spokesman Paul Nolasco said.

Toyota received no public money for developing the battery or any other part of the Prius, he said.

Growing concerns about global warming and soaring gas prices have made the Prius a global hit. The car uses hybrid gas-electric propulsion technology that boosts fuel efficiency by switching between a gas engine and electric motor.

Japanese companies have a reputation for having close relations with the government, and some private-sector projects receive public money, especially those for clean energy. But there have been no previous high-profile reports alleging that Toyota’s hybrid project received public money.

Separately, Toyota and Fuji Heavy Industries, the maker of Subaru cars, in which Toyota owns an 8.7 percent stake, said they were in talks about collaborations but denied a report in The Nikkei business daily they were considering raising Toyota’s stake in Fuji to 17 percent.

Toyota is generally cautious about taking over companies. It took three decades to make Daihatsu Motor Co., which makes small cars, and Japanese truckmaker Hino Motors Ltd. its subsidiaries since an initial partnership. Toyota also holds a 5.9 percent stake in truckmaker Isuzu Motors Ltd.

Under the current alliance, Fuji makes Toyota’s Camry sedans in the U.S., while Daihatsu makes the Justy compact car that Fuji sells in Europe.

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