Toyota bets its hybrids can win hearts of diesel-loving Europeans

Automotive News | September 9, 2013 - 5:15 pm EST

FRANKFURT -- Can hybrids woo European car buyers away from their traditional favorite fuel-economy technology -- diesels?

Toyota, which has searched for a way to replicate its market-leading success elsewhere in Europe, is betting that they can. The automaker is planning to fill its display at the auto show here with hybrids as a statement, Toyota Motor Europe President Didier Leroy told reporters today.

He says that Toyota is finding its hybrid expertise to be "a key differentiator from some of our competitors" and a major contributor to profitability. Toyota has said that it will make a profit in Europe this year for the first time since 2007.

Toyota expected that 15 to 17 percent of its sales in Western Europe this year would be hybrids, but is on track to hit 27 percent, Leroy says. Lexus is selling 94 percent of the hybrids in the region.

Mark Templin, executive vice president of Lexus International, says hybrids offer a way for Lexus to wedge its way into Europe's notoriously tough luxury market: "We think our innovation card in Europe is hybrids."

And, says Karl Schlicht, executive vice president for sales at Toyota Motor Europe, many of Toyota's hybrid sales come from buyers who previously owned diesel vehicles.

"I think it's a price and CO2 and technology play," Schlicht says. He adds that as more-stringent European Union emissions rules take effect, over the next decade diesels will become more costly and less attractive to consumers.

"We don't see a rapid decline," he said. "We see a slow decline of diesel."

Toyota has a long way to go to supplant diesels in Europe. But if it can parlay its hybrid credibility into an identity as the go-to brand for hybrids, that may give it a nicely profitable niche.

Dave Guilford is enterprise editor of Automotive News.Dave Guilford is enterprise editor of Automotive News.

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