updated 7/26/2007 5:04:07 PM ET 2007-07-26T21:04:07

Porsche AG's first hybrid vehicle will be ready within three years, the head of the luxury automaker's new hybrid program announced Thursday, saying it showed progress by a company derided by some environmental groups as a climate destroyer.

Leaders of Germany's auto industry have rejected criticisms that they lack the initiative to build more environmentally friendly cars, saying this week that they were working on new, fuel-efficient models.

Porsche's Cayenne hybrid is being developed in part with Volkswagen AG and Audi AG, and when complete is expected to reduce the sport utility vehicle's fuel consumption by almost one-third.

The four-door SUV is expected to be on the market by the end of the decade, the Stuttgart-based automaker said, a major move for the company in an increasingly carbon-conscious world.

Michael H. Leiters, the head of the hybrid program, said the move toward a hybrid is part of a wider effort to help its customers shake off the image of being gas-guzzling planet haters.

"If you drive a Porsche in the neighborhood and everyone is ... saying you are environmentally unfriendly, that is not good for us," he said, adding that developing the hybrid is "for us, a good solution."

Criticism about Porsche's sports cars, which include the Boxster and 911, can be severe.

Greenpeace protested the company's production at its plant in Zuffenhausen on Thursday, accusing it of building cars the group called "climate pigs."

Porsche noted in response that in Germany, less than 12 percent of all exhaust emissions come from passenger cars, with Porsche's share of that being less than 1/10th of 1 percent.

The hybrid Cayenne prototype emits just 240 grams of carbon dioxide per kilometer, compared with 310 grams from a normal gas-powered Cayenne.

Porsche won't say how much the hybrid version will retail for, but it has said the United States is the key market for the car.

The hybrid will use about 2.4 gallons of gas per 62 miles, 3.4 gallons for a conventional model. So far, in testing, it gets about 24.4 miles per gallon compared with 17.9 miles per gallon for a conventional Cayenne.

The new Cayenne will sport a full-hybrid design where the hybrid module _ the clutch and electric motor _ is positioned between the combustion engine and the transmission rather than having the hybrid drivetrain branching out along various lines and in many directions via a planetary gearset.

Manfred Schuermann, manager of powertrain and alternative propulsion, said Porsche selected the design because the in-line configuration of the hybrid components were more compatible with the existing Cayenne platform.

"We've learned a lot from this project and we can transfer it," Leiters said, as the maker of the iconic 911 roadster offered a rare public view of its plans for the hybrid Cayenne.

"We think in the next five to 10 years that hybrid technology will be a niche technology," Leiters said on the grounds of the German automaker's proving track, where a pair of hybrid Cayenne SUVs were being put through their paces.

But he said that advancements derived from hybrid drivetrains and engines would find themselves incorporated into overall auto research and development in the coming years.

Germany's auto industry, which includes Volkswagen AG, DaimlerChrysler AG and BMW AG, has come under repeated criticism that it has not built more environmentally friendly vehicles.

Heavy lobbying from Germany forced the European Union earlier this year to water down a plan for emissions reductions and sparked a debate in Germany over the industry's role in fighting global warming.

The EU plan that passed calls for drafting of lower emissions limits _ of 130 grams of carbon dioxide per kilometer _ for new cars sold or imported into the 27-nation union by 2012.

It also calls for increased use of biofuels and cleaner fossil fuels, meant to reduce current car emission levels by 25 percent _ even lower than the 130 gram limit.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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