The company also said it is pushing ahead on the development of plug-in hybrids, and is currently working on a next-generation hybrid that is capable of a greater range of electric-only operation.
In parallel with its hybrid program, Toyota announced that it will completely revamp its gasoline engine and transmission lineup by 2010 to improve fuel efficiency and reduce exhaust emissions. As part of this initiative, the company unveiled a new 1.8-liter gasoline engine and continuously-variable transmission that will be its main powertrain for compact and midsize passenger vehicles, starting with new-model vehicles due out this fall.
With a nod to the flex-fuel alternative touted by U.S. automakers, Toyota announced a 2007 launch of flex-fuel vehicles for the Brazilian market that can run on 100 percent ethanol. The company also said it's considering flex-fuel vehicles for the U.S. market.
Looking ahead, the company said it is continuing its fuel cell development program, with current efforts focusing on practical drivability issues like cold-weather startup.
Looks to us like Toyota is following the classic strategy maxim, "Hit 'em where they ain't," exploiting its lead in hybrid technologies to take away future market share from competitors without as strong a hybrid product line, like General Motors, Ford and Chrysler. At the same time, the company is covering its bets with high efficiency gasoline-only engines and flex-fuel vehicles that raise the bar from E85 to E100.