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Japan's Hybrid Cars

Toyota and rivals are betting on pollution fighters. Will they succeed?

It was Toyota Motor Corp.'s most extravagant product launch in years. As chimes sounded, huge video screens showed scenes of sky and birds. A giant globe rotated slowly on stage, then stopped to reveal a sporty compact car placed inside it. A broadcast voice summoned Toyota President Hiroshi Okuda to take a ride in the Prius, the world's first mass-produced car powered by a combination of gasoline and electricity. Six-foot-tall Okuda squeezed into the back of the Prius while Toyota chief engineer Takeshi Uchiyamada drove the car silently down a ramp to the ballroom floor of Tokyo's ANA Hotel.

Quite a spectacle for just one new car among the score the giant auto maker has recently launched. But Toyota was not just presenting the Prius, which goes on sale in Japan on Dec. 10. It was making a declaration--that the Prius would be the first of a new generation of Toyota cars whose engines would cut air pollution dramatically and boost fuel efficiency to spectacular levels. Toyota, in short, wants to launch and dominate a new "green" era for automobiles--and it will spend billions to do it. Says engineer Uchiyamada: "We wanted to design a car that would set a new standard for the 21st century." After conquering Japan, Toyota plans to sell the Prius and other green cars in the U.S.