Hopes high for Japan's hybrid cars

From CNN's Technology Correspondent Kristie Lu Stout

HONG KONG, China (CNN) -- Hybrid gasoline-electric cars have been getting off to a slow start, but in Japan hopes are high that the latest clean machines will outpace the gas guzzlers.

At Toyota's fifth environmental forum in Tokyo, the carmaker is driving home a simple message -- the hybrid is still hot.

"We have continued to pursue development of hybrid technology as a versatile power source, as the core technology for eco-car development," says Toyota Motor Corp president, Fujio Cho.

Hybrid cars take in both climate-heating gas and eco-friendly electricity, emitting as much as 40 percent less carbon dioxide than the usual internal-combustion engine.

U.S. automakers Ford and General Motors have plans to roll out hybrid cars in the next two years. The only ones on the market today are built by Japan's Honda and Toyota.

Launched back in 1997, Toyota's Prius was the first hybrid on the block. These days, the company is kicking the tires of a new and improved version.

The Prius 2004, analysts say, is bigger, faster and cleaner than the original.

"The next generation Prius is exciting technology. Its proof that hybrid technology can deliver both better performance as well as better environmental protection," Jason Mark, Director at the Union of Concerned Scientists says.

Cho is optimistic about the new model, which will go on sale later this year in Japan, Europe and the U.S.

"Toyota has sold only 140,000 hybrid hatchbacks around the world. To spur demand, the carmaker is banking on more choice," he says.

Toyota aims to achieve this by boosting its hybrid model range to six in the next three years -- a range that includes a hybrid minivan, a hybrid luxury car, even a hybrid SUV, which is the vehicle class that has provoked the ire of environmentalists.

Also in the pipeline is a hybrid city bus, which will start service on the streets of Tokyo later this year.

The market for hybrid electric cars is expected to grow from 100,000 a year to 500,000 by 2008. Its a sizeable increase, but it is still a tiny market.

There are about 70 million cars on the road in Japan right now and it will take some time for this clean machine to go bumper to bumper with the gas guzzlers.