Toyota's Hybrid System May Be Extended to Other Automakers

Toyota's Hybrid Car System May Be Extended to Other Automakers

Toyota Motor Corp., the world's biggest supplier of gasoline-electric hybrid vehicles, said it may license its system to other carmakers, as demand for vehicles with better fuel economy grows.

The carmaker currently licenses hybrid technology to Ford Motor Co. and Nissan Motor Co. The system can potentially be applied to vehicles powered diesel, natural gas, or hydrogen, said Executive Vice President Akihiko Saito in an interview at the North American International Auto Show in Detroit.

``We are being more open to other automakers that are willing to use our hybrid technology,'' said Saito.

Toyota, which released its first gasoline-electric Prius hybrid in 1997, plans to sell about 300,000 hybrid vehicles a year by mid-2006. Carmakers are spending billions of dollars to develop cleaner hybrids or fuel-cell vehicles to meet tougher emissions laws around the world.

``Toyota is way ahead of its rivals,'' said Norihito Kanai, an analyst at Tokyo-based Meiji Dresdner Asset Management Co., which manages $2.5 billion in equities. ``Hybrid technology is the one that's working now and Toyota really has a lead.''

Toyota shares rose 10 yen, or 0.2 percent, to 4,130 yen in Tokyo at 1:37 p.m.

Hybrid Technology

Hybrids combine a conventional gasoline engine with an electric motor. At low speeds, the electric motor powers the vehicle, and the gasoline engine accelerates as the car gains speed. The vehicle's battery pack is charged by the gasoline engine and by power regenerated by the brakes.

Toyota and Honda Motor Co. were the first automakers that made hybrid vehicles for the mass market. Toyota, which sold 123,038 hybrids during the first 11 months of 2004, has six hybrid models. It plans to add hybrid RX 400h and Highlander sport-utility vehicles this year and a hybrid version of the Lexus GS sedan in 2006.

General Motors Corp. and DaimlerChrysler AG plan to release a joint developed hybrid vehicle in 2007, 10 years after Toyota released the Prius.

Ford, which used some technology licensed by Toyota, started to sell Escape hybrid sport-utility vehicle in September 2004. Nissan, 44.4 percent owned by Renault SA, will begin selling the Altima hybrid models with Toyota's components in 2006. Toyota doesn't reveal how much it earns from licensing hybrid technology.

Toyota's decision to license hybrid technology will help it recoup its research and development costs, said Koji Endo, an analyst at Credit Suisse First Boston.

Convincing Skeptics

``Other companies were very skeptical when we said we will sell 300,000 hybrids a year, now it seems like everyone feels they need to release hybrids quickly,'' said Saito. ``We welcome their moves. It helps hybrids become the mainstream.''

Honda, which offers Insight, Civic and Accord hybrids, sold 26,773 hybrids in the first 11 months of last year. Toyota has sold a cumulative 306,862 hybrids between 1997 and Nov. 2004 and Honda has sold a total of 81,867 hybrids between 1999 and November 2004.

Honda President Takeo Fukui said he plans to mainly install hybrid system in mass-produced vehicles instead of hybrid-only models to keep costs lower and make hybrids more available.

Tokyo-based Honda is also relying on variable cylinder management, a technology, which varies the number of engine cylinders firing depending on how much power is needed, using more for acceleration and fewer at low engine loads.

``By using variable cylinder management, we can easily match the fuel efficiency of hybrids,'' Fukui said. ``Ultimately, fuel cell vehicles will probably become the solution.''

Hybrid-only

Analysts said that Honda's decision not to make hybrid-only vehicles is one reason the company lags Toyota in sales.

``Honda needs a dedicated hybrid vehicle,'' said Graeme Maxton, managing director of London-based consulting firm Autopolis. ``The Civic, which also comes in a regular gasoline version, is facing difficulty in boosting sales because people can't really see the difference from the outside, while the Prius only comes in a hybrid version, which has helped sales go up.''

Toyota President Fujio Cho sees the annual 300,000 unit sales target as a ``challenge.'' Toyota expects 200,000 will come from the Prius. The automaker plans to sell 100,000 Prius in the U.S., 70,000 in Japan and the rest in regions such as Europe and Australia, Cho said at the Detroit show.

``We didn't think hybrids could last with the first version of the Prius, because although it was a clean car, it lacked excitement and cars need to be fun or they aren't sustainable,'' said Saito, who oversees Toyota's development and technology. ``When the second one came out, we were finally certain that we had a hybrid that can become one big trend.''

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