Toyota plans to use petrol-electric hybrid engines in all vehicles by 2012 to increase fuel efficiency and reduce tailpipe emissions, a senior engineering executive told Bloomberg News this week.

The petrol-electric system emits as much as 40% less carbon dioxide than traditional internal-combustion engines, Masatami Takimoto, managing director for engine engineering, told Bloomberg in an interview at a Detroit conference.

According to Bloomberg, Toyota was the first to market with the Prius hybrid in 1997 and 36,928 of the 5.9 million cars and trucks it sold last year had hybrid drivetrains.

Some rivals such as General Motors are focusing on fuel cells rather than hybrids, Bloomberg said.

Ford is showing a hydrogen fuel cell-powered Focus sedan at this week’s Birmingham motor show – the vehicle embarrassed the company by breaking down in Britain’s notoriously rainy weather during a demonstration earlier this month.

Fitch Ratings analyst Chris Struve told Bloomberg News that Toyota is the only car maker capable of soon building enough hybrids to overcome the current $US3,000-a-vehicle cost disadvantage against traditional cars and trucks.

“The only way to bring costs down is to increase production,” Struve told Bloomberg.

“If they can pull it off, their fuel economy would be beautiful and they’d never have to worry about emissions.”

Apart from the Prius, sold in the US, Japan and Europe, Toyota also sells hybrid models of the Crown sedan, Estima minivan and Coaster bus in Japan, Bloomberg said, adding that Honda is currently the only other car maker to sell petrol-electric hybrid models – the two-seat Insight [about to be withdrawn from the UK] and a Civic saloon (which replaces the Insight in the UK next March].

Toyota plans to use much of the technology it is developing for hybrids on fuel-cell vehicles, which it expects will be mass-produced by 2010, Takimoto told Bloomberg News.

“Hybrids are our core technology for the solution of environmental problems,” Takimoto said, according to Bloomberg, adding that the company expects to sell 300,000 hybrids annually through its own dealerships by 2007, two years later than indicated in previous statements.

That number could be doubled or tripled by sales of the technology to other companies, Takimoto told Bloomberg News.