DaimlerChrysler AG'S Chrysler unit, which has for years stayed away from hybrid vehicles and focused on diesel engines instead, will launch its first hybrid vehicle in 2008, the unit's chief of product development said on Wednesday.
"The hybrid Dodge Durango will be the beginning of a line-up of hybrid vehicles at Chrysler," Frank Klegon told Reuters in an exclusive interview at the New York International Auto Show.
Hybrids, which run on a combination of engine power and batteries, are popular for better fuel economy but cost more than regular vehicles, and consumers are often reluctant to pay the extra price.
Chrysler and its European parent company are known for their focus on diesel engines as an alternative to gasoline for better fuel efficiency, and have said in the past that hybrid technology was too expensive.
"We still believe it's very expensive," Klegon said. "It's not a great business case. But we have to balance the market pull with regulatory requirements," he added.
The Dodge Durango will feature a two-mode hybrid system developed jointly by General Motors Corp., BMW and DaimlerChrysler, and will boost the vehicle's fuel efficiency by as much as 25 percent, Klegon said.
A two-mode system allows for better fuel economy in highway driving as well as at lower speeds.
Klegon said both hybrid and diesel vehicles are estimated to account for 5 percent to 15 percent of industry sales over the next 10 years.
"We are still very much a proponent of diesel," Klegon said. "The penetration of diesel vehicles is very high in Europe, and we see that increasing in the United States in the coming years," he added.