German Carmakers Catch Hybrid Fever

When Toyota introduced the hybrid Prius model in 1997, which is powered by an electric motor for short city distances and a traditional gasoline-powered motor for longer, high-speed hauls, company executives had relatively moderate expectations. But driven by a 153 percent rise in US sales of the flashier, improved 2004 version, Toyota has been forced to boost production -- from 43,000 to 130,000 cars -- in 2005.

What's more, the Prius has also received car of the year awards in both the United States and Europe and the unofficial endorsement of countless green-minded celebrities, including Leonardo DiCaprio, who like to tool around Hollywood in their Prius cars.

Caught off guard by the Prius' success, competitors, including German carmakers who have long banked on the rise of diesel-powered motors as a greener alternative to traditional gasoline powered cars, are struggling to catch up.

On Monday, DaimlerChrysler and GM announced plans to jointly develop new hybrid technology. Other German carmakers, including Volkswagen and Porsche, may follow.

The next big thing?

The runaway success of a hybrid car that was initially intended to exploit a green niche in the market has caused some industry analysts to wonder if the technology is sparking a revolution in the car industry. Some have even likened it to the biggest thing since the invention of the internal combustion engine.

"In 20 or 40 years" all the automotive group's cars will be hybrids, the man in charge of Toyota's research and development, design and product development, Kazuo Okatmoto, told the car industry magazine Automotive News Europe.

"And it won't just be Toyota. All makers will have hybrids," he said.

Hybrid models planned for 2007

Okatmoto's predictions may well come true. In a press statement released on Monday, GM and DaimlerChrysler announced that they had signed a memorandum of understanding, which confirmed their intention to develop new hybrid technology together. A more formal contract will be signed in 2005.

According to the statement, a few hundred million dollars -- no specific figures were given -- will be devoted to developing the technology, with the goal of rolling-out the first vehicles by 2007. Among the first to hit the market will be a hybrid version of the Dodge Durango with a luxurious Mercedes hybrid planned for later that year.

Next generation of hybrid cars planned

But executives at GM and DaimlerChrysler indicated they weren't content to ride on the coattails of their Japanese competitors and promised to develop a new generation of hybrid cars incorporating the so-called "two-mode system," which they claim will boost fuel economy in some models by 25 percent.

Eric Ridenhour, executive vice president of product development at Daimler's Chrysler division, likened current hybrid technology to videocassettes. "We like to think of this as the DVD or streaming video, the whole next way of doing it," told reporters in Detroit Monday.