Report: Toyota to add subcompact dedicated hybrid in the U.S. by 2012

At the 2010 Detroit Auto Show next month, Toyota will unveil a new dedicated hybrid concept (no name confirmed yet). According to sources familiar with the project, Toyota plans on expanding its hybrid lineup with a new subcompact hybrid-only model, which will be based on the concept seen in Detroit.

The model, which will be smaller and more affordable than the Prius, is scheduled to go into production in Japan in late 2011 and will hit U.S. shores in early 2012. The subcompact hybrid is also expected to get better fuel-economy than the Toyota Prius.

Insiders say that Toyota is counting on the new subcompact hybrid to be a big seller and plans to produce 150,000 units annually.

By the end of 2010, Toyota will increase its hybrid vehicle output as it expands its battery venture with Japan’s Panasonic Corp to produce more than 1 million nickel-metal hydride batteries. The collaboration will also see an increase in the production of lithium-ion batteries for a plug-in Prius hybrid going on sale in late 2012.

As Detroit News points out, adding another high-profile hybrid to its lineup would not only boost sales for Toyota, but also increase profitability of the Japanese automaker’s hybrid car business by reducing the per-vehicle cost of components.

Toyota Dedicated Hybrid Concept Teaser (2010 Detroit Auto Show):

– By: Kap Shah

Source: Detroit News