How much did it cost to develop the new generation Toyota Prius hybrid? The colour drains from the face of chief engineer Akihiko Otsuka, it's probably not the sort of information the company wants him to give out.

"It's difficult to put a number on it," he replies diplomatically. "But we have had 2,000 engineers working on the project for four and a half years - so it's a lot."

Toyota hopes that it will be money well spent as it plans to move the Prius from "niche to mainstream," according to Toyota Motor Europe's product planning chief Duncan McMath.

To achieve this, the new Prius comes with a larger engine - up from 1.5- to 1.8-litre, for more comfortable motorway cruising while the packaging of the hybrid system has been improved thanks to a smaller battery pack and electric motor.

Smaller, but more powerful with output upped from 50kw to 60kw and CO2 emissions down to 89 g/km. For Toyota, the Prius is the lead technology in a plan that will eventually spawn plug-in hybrids, fully electric vehicles and fuel cell hybrids. The company wants to be selling 1m hybrids a year by 2020.

To achieve this, Otsuka says the hybrid technology needs to find its way into more Toyota vehicles, particularly the smaller ones. He said: "The big challenge is managing the cost. On Aygo, for example, the system would add 30-40% to the cost of the car and customers now would not be willing to accept that. But we will start to roll the technology out in other segments and you will hear further announcements in the coming months."

Otsuka said there are no current plans to develop a diesel hybrid. "Diesel costs are still not realistic and while CO2 might be better we can't achieve significant improvements in other emissions such as NOx particularly as we move towards Euro 6 legislation which is much more severe on NOx."

Prius plant busy