THE GAS MISERS

Last year Toyota launched a U.S. ad campaign pitching the Prius as a big, sexy "real car," not a green techno curiosity. One spot called Prius "the world's biggest hybrid," and showed the universe being sucked into the car's yawning rear hatch. The ad also noted that "you never plug it in"--an attempt to distance the Prius from old electric cars. A Toyota ad this summer billed "mpg" as more peaceful getaways, over a picture of a scantily clad couple on the beach.

It's also worth noting how much attention Toyota is focusing on hybrid technology. Toyota is posting record sales and building a cash reserve of more than $40 billion while other carmakers are struggling. "They could eat a number of other car manufacturers for lunch without even noticing it on their balance sheet," says auto analyst Ryan Tutak at Ducker Worldwide. Yet Toyota has avoided the recent frenzy of industry mergers and instead focused on key models, including hybrids. A hybrid luxury SUV will appear next year and a hybrid Camry in 2006. "Ford and GM have more brands than anyone, but Toyota is piling up the money," says Tutak. "Which horse are you going to bet on?" For Toyota at least, hybrids look like a winner.

WITH KEITH NAUGHTON IN DETROIT, MASATO KAWAGUCHI IN TOKYO AND BUREAU REPORTS

© 2004