Hybrids key to Toyota’s future growth

Hybrid cars, such as this upcoming Lexus hybrid, will be key to Toyota's future growth.

Another Toyota hybrid

Many more Toyota hybrids coming

Despite significant recall problems and massive sale’s incentives, Toyota was able to achieve a quarterly profit of $1.2 billion in the first quarter of this year. However, analysts and company insiders acknowledge that Toyota’s road ahead will still be difficult, although the worst could be behind according to President Akio Toyoda.

And as Toyota moves forward, Toyoda also stated that green vehicles, such as hybrid cars, and emerging markets, such as China, will be the key to future growth.

In the past Toyota has stated a goal of 30 percent hybrid by 2020, including hybrid versions across its entire vehicle lineup. Next year alone Toyota has announced that it will double hybrid production to 1 million hybrid vehicles per year, and as many as a dozen new Toyota hybrids could hit the market in just the next several years. Likewise, the automaker will also begin offering plug-in hybrids by 2012, as well as full electric cars.

Nevertheless, while Toyota’s hybrid bullishness is certainly good news for hybrid fans, one wonders how accurate Toyota’s hybrid forecasts will be if Toyota struggles to achieve profits over the next few quarters. Thus, with smaller quarterly profits – if any – how can Toyota justify increasing hybrid production without increasing hybrid profit margins significantly? Are such hybrid profit margins even possible?

Of course, not long ago most executives and analysts in the auto industry mocked Toyota’s hybrid sale’s projections only to be left with egg on their faces as Toyota largely achieved their goals, and if Toyota can sell close to a million hybrids per year next, I’d definitely concur that the worst is far behind Toyota.

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