Inside Line: Toyota Promises Cheaper Hybrid System by 2008 -

Toyota Continues to Ride the Experience Curve for Hybrids
3rd Generation to be Cheaper, Lighter & Higher Performing by 2008

About the same time that GM & Chrysler get their first generation hybrids out, Toyota will be on its third. Toyota promises that their next generation system will be cheaper, lighter, and higher performing. Toyota expects to double its hybrid production, currently at 300,000 worldwide. Toyota also expects to produce components in the United States.

A good location for new hybrid production in the US would be the modern Subaru plant in Lafayette, Indiana. This is one of the assets that GM lost control of when it dumped its stake in Subaru earlier this year.

Of the US automakers, only Ford understood that unit sales of hybrids aren't about market share, it's about building a technology base that lets you ride the "cost curve" or "experience curve" whereby costs decline as a function of accumulated units produced. When you have a product that has a pronounced experience curve, once you have a lead, it is very hard for others to catch up.


Inside Line: Toyota Promises Cheaper Hybrid System by 2008 -




Auto Market Entering End of the Year "Dead Zone"

We are in the season where virtually nothing new will come out between now and early January 2006 when the Detroit Auto Show introductions will take place. Detroit will likely feature the 2007 Toyota Camry and the well-publicized full-size GM suvs. Look for some surprises in the early spring next year. I predict that either Toyota or Honda will announce a hybrid minivan. Speaking of Hybrids, look for Toyota to demo a version of the Prius with siginificantly higher performance. This Prius may or may not be available for sale.

Daimler Chrysler will awaken from its auto slumber. There will be more buzz over the Dodge Caliber, the controversial replacement for the neon. The replacement for the "sky cars" (Cirrus & Stratus) will be fleshed out. Don't be surprised if DC puts the 3.5 liter V-6 in the minivans with a new Kokomo-built 6-speed automatic transmission.