Toyota (NYSE:TM) is the darling of the automotive world. Whereas American giants like Ford (NYSE:F) and General Motors (NYSE:GM) seem to stumble from crisis to crisis, Toyota has blazed a path to torrid growth. Now, the Japanese juggernaut is laying out another bold plan -- to rapidly increase the number of hybrid vehicles in its lineup. The company's aspiration doesn't make a lot of sense based on current data, but its plan seems to have less to do with today and more to do with the not-so-distant future.
Toyota currently offers five hybrid models, but by 2010, it plans to offer 10, with a target of 1 million hybrid sales annually after that year. Reuters quotes Masatami Takimoto, Toyota's executive vice president for technology development, as saying that hybrids "will be the core technology of the 21st century."
Takimoto's prediction seems fairly bold. True, Toyota's Prius continues to sell well, with 8,103 units purchased last month. However, sales of Toyota's other hybrids have not been nearly so robust. The new Camry hybrid, for example, had sales of 3,032 units in May, the first full month it was available.
The message from the divergence in Prius and the hybrid Camry sales numbers seems to be that consumers are looking for more fuel-efficient alternatives, but that price trumps all. The trend toward an increased interest in fuel miserliness also seems to be backed up by robust sales of the low-priced and highly fuel-efficient Yaris, a subcompact introduced a month before the Camry hybrid. With the Camry hybrid priced at $6,000 more than the base conventional model, though, consumer interest seems destined to stay limited.
However, just because the Camry hybrid is much more expensive than its conventional counterpart today, that doesn't mean the price difference will hold forever. Even if Toyota is not seeing strong hybrid sales beyond its Prius model at the moment, increasing hybrid production now is likely to help the automaker achieve its goal of halving the cost of hybrid powertrains and closing the price gap between hybrid and conventional models. If Toyota can make good on these plans, its darling status is likely to be secure for years to come.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
