Toyota Pushes Ahead on Alternative Vehicles

By KATE LINEBAUGH
DETROIT—Toyota Motor Corp. is pushing ahead with releases of electric and fuel-cell vehicles in the next few years, as the Japanese auto maker moves forward with multiple alternative technologies in addition to its flagship gas-electric hybrid engines.

The company plans to begin sales of a small electric vehicle in 2012 and to begin selling hydrogen fuel-cell vehicles in 2015. Toyota said it plans to release eight new hybrid models in the next few years and aims to sell one million hybrid vehicles world-wide annually by the early part of this decade.
Toyota Motors Sales President Jim Lentz said he just received approval from Japan to expand the Prius into what he hopes will be a line of several new models.
A likely contender to join the Prius family is a concept hybrid-compact vehicle that Toyota unveiled at the Detroit Auto Show on Monday. The new car is smaller than the Prius and would be more affordable, in an effort to draw younger buyers.
"Prius has become a great brand and we can capitalize on that," Yoshi Inaba, president of Toyota Motor North America, told reporters.
This decade, Mr. Lentz expects the Prius family of vehicles to outsell the Toyota Camry, currently the top-selling passenger car in the U.S. Mr. Lentz said electric vehicles are still constrained by the limited distance current battery technology is capable of.
Toyota has put conventional hybrids at the center of its alternative technology strategy and has set a goal to have that option in all its models by 2020.
At the same time, The company is also moving forward with electric, fuel-cell and plug-in hybrid vehicles and will begin mass producing lithium-ion batteries with its partner Panasonic Corp. next year. That partnership will be capable of making one million hybrid batteries by the end of the year.
The electric vehicle Toyota plans to begin selling in 2012 will be a subcompact city vehicle that will have a range of about 100 miles. The company, however,Toyota has yet to decide whether it will seat two or four people, Mr. Lentz said.
In last year's difficult U.S. sales environment, Toyota managed to increase its share and outsold General Motors Corp. in the U.S. retail market.
But it wasn't without some struggles. The company announced its biggest recall ever related to sudden acceleration issues Toyota says were caused by floormats jamming under the accelerator pedal.
Mr. Inaba reiterated that the company is doing everything possible to resolve the issue. "We have really strengthened our antenna to collect technical data so we can react quickly," he told reporters. "We learned the lessons."
Toyota will be installing a new brake override system on all vehicles by the end of the year to help address the issues, in addition to a series of changes to the gas pedal and floor pan. Toyota dealers have begun making the changes to several of the models.
This year, Toyota's Mr. Inaba said he expects U.S. vehicle sales to rebound moderately this year but to accelerate in the next two years. The company predicts U.S. sales will rise to about 11.5 million vehicles this year from 10.4 million last year. "I think there will be a bigger increase in 2011 and 2012. The next two to three years will be very robust growth," said Mr. Inaba.
Anticipating higher sales this year, Toyota plans to increase production to about 1.9 million or two million cars and trucks, Mr. Inaba said. The company, which produced about 63% of its products in North America last year, is considering increasing local production but has yet to make any firm determinations, he said.
U.S. auto sales fell to their lowest level since 1982 last year as the sluggish economy and job losses kept consumers away from big ticket purchases.
Write to Kate Linebaugh at kate.linebaugh@wsj.com