Friday, June 8, 2007

10 years after first hybrid, Toyota hits 1 million mark

By Yuri Kageyama (The Associated Press)

TOKYO — When Toyota unveiled its Prius hybrid to the automotive press in 1997, there was some sneering about the new technology. It was too complicated, some said, and it relied too much on a complex system of switching between a gas engine and electric motor. Ten years later, the skeptics have been hushed. On Thursday, Toyota marked a milestone: More than 1 million worldwide sales of its hybrid vehicles, an achievement that underlines the Japanese automaker's 10-year lead in the "green" technology that has changed the face of the global auto industry.

Toyota's cumulative sales of gas-and-electric-powered vehicles totaled 1.047 million as of the end of May. Of those, nearly 345,000 hybrids were sold in Japan, while 702,000 were sold abroad, the company said in a statement Thursday. Sales of Toyota hybrids have climbed from just 18,000 in 1998 to 312,500 last year, the company said. Last week, Toyota said it sold just over 24,000 Priuses in the U.S. during May, boosting the car into ninth place among all U.S. vehicle sales for the month and cracking the list of 10 top for the first time.

Demand for hybrids, which deliver superior mileage by switching between a gasoline engine and electric motor, has soared amid higher fuel prices and greater consumer concern about pollution and global warming. The Prius, which gets 55 miles per gallon in combined city and highway driving conditions, has been enormously popular as a midsize sedan, a best-selling vehicle category. Although most automakers are working on hybrids, Toyota has the advantage of almost 10 years of experience in selling the technology, and in using feedback from drivers to make improvements, rather than relying on information from labs. Toyota has placed a large emphasis on hybrid technology: It offers several other hybrid models, including the hybrid Camry and hybrid Lexus models. The company also started domestic sales of its most expensive hybrid, the $124,000 Lexus LS 600h. It will be exported over the summer, according to Toyota.

Not all hybrids sell well. Earlier this week, Honda said it will discontinue the hybrid version of its Accord sedan, which sold poorly because it didn't fit the customer-demand profile of the smallest, least expensive hybrids with the highest gas mileage.

The Prius, by contrast, has sold 478,800 units since the start of 2005. Among American automakers, Ford has the hybrid Escape sport-utility vehicle and General Motors sells the hybrid Saturn Vue Green Line sport-utility vehicle and hybrid trucks. GM has also promised four new hybrids this year, the Chevrolet Tahoe and GMC Yukon sport-utility vehicles, and the Saturn Aura and new Chevrolet Malibu sedans.

Yasuaki Iwamoto, auto analyst with Okasan Securities, said that rivals will have a hard time catching up to Toyota in hybrids — and that the technology will play a key role in defining Toyota in the years ahead. "Ecological features are going to be very important for building Toyota's brand image amid intensifying competition, and Toyota will continue to push the hybrid to the forefront," Iwamoto said.

The next innovation in hybrids is expected to come from a new type of battery, called the lithium-ion battery, which will be smaller and lighter than the nickel-metal hydride batteries Toyota now uses for its hybrids.

A major breakthrough is needed to switch to lithium-ion batteries, now widely used in laptops, to make them power cars. Mitsuo Kinoshita, a senior Toyota executive, recently denied Japanese media reports that Toyota had given up on having a lithium-ion battery system for the next-generation Prius. "We're still working on it," he told reporters.

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