Nissan unveiled a prototype of the 2007 Altima Hybrid, based on its popular US-built Altima mid-size sedan, in San Francisco on Wednesday.

The car is scheduled for launch in 2006 in the US and will compete with the hybrid Accord Honda is scheduled to launch later this year and a hybrid Toyota Camry in the works for a 2006 launch.

Featuring a combination of Nissan’s four-cylinder petrol engine and new hybrid system components supplied by Toyota Motor Corporation, the Altima Hybrid is claimed to achieve the acceleration performance of V6 engines with fuel efficiency higher than compact cars.

In a statement, Nissan said that hybrid vehicles available today are mostly equipped with rather small motors focused on environmental performance but its Altima Hybrid is “a breakthrough model, which provides new feeling of driving pleasure to customers with its dynamic acceleration performance, while minimising the impact to the environment at the same time.”

In September 2002, Nissan and Toyota signed a basic agreement that Nissan will produce 100,000 hybrid vehicles within a five-year period.

Toyota will supply the hybrid system components (transaxle, inverter, battery, and control unit), and Nissan will develop the engine and unit adaptation. This prototype is the first completed by Nissan under the agreement.

The statement said the co-operation between Nissan and Toyota is proceeding extremely well, which made it possible to complete the prototype earlier than two years after signing the basic agreement.

Nissan will further refine the vehicle based on this prototype, and will start production of the Altima Hybrid as a 2007 model year car in 2006.