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Toyota aiming to make hybrid systems cheaper

Toyota Motor Corp. could begin using a cheaper and smaller hybrid system as of 2008, a spokesman told the Asahi newspaper, which also reported that the company plans to more than double production by then to 600,000 hybrids a year.
/ Source: Reuters

Toyota Motor Corp. could begin using a cheaper and smaller hybrid system as of 2008, a spokesman told the Asahi newspaper, which also reported that the company plans to more than double production of the fuel-sipping vehicles by then to 600,000 units a year.

Since rolling out the world’s first gasoline-electric hybrid car in 1997, Toyota has improved the powertrain with a second-generation system it calls THS II, which powers the remodeled Prius and Lexus RX400h SUV, among others.

But the hybrid system, which allows vehicles to run on an electric motor under certain driving conditions to save fuel, still costs manufacturers -- and consumers -- a premium of thousands of dollars over regular cars.

By making the system smaller, Toyota aims to slash the premium by half and expand its use to most of its mid-sized or larger cars, the Asahi said, without citing sources.

Toyota executives have said they aimed to eventually make the powertrain available across its entire product line-up.

Toyota has been pouring R&D resources into addressing the cost issue, but a spokeswoman said a target date for a third generation hybrid system had not been set. “2008 is certainly a possibility, but we don’t know that yet,” she said.

Toyota expects to build and sell about 250,000 hybrid vehicles this year through its eight model offerings.

Next year, that will rise to between 350,000 and 400,000 units, boosted by the addition of the Camry hybrid to be built in Kentucky, and the China-built Prius, production of which has been targeted to begin by this year.

Toyota is aiming to sell 1 million hybrid vehicles annually some time in the decade beginning in 2010.

Led by Toyota’s aggressive push, sales of hybrid vehicles have risen sharply over the past few years, particularly in the United States and Europe.