All the reports today link Toyota's decision to declining sales of gas-guzzlers. President Katuaki Watanabe's comments to reporters does NOT yet mean Toyota is going to re-enter the race to beat GM with mass-produced PHEVs for the public, but it does move the company's timetable for delivery of hundreds of PHEVs for evaluation by fleets from early 2010 to sometime in 2009. (The Chevy Volt is still scheduled for delivery in late 2010 -- see latest details at http://www.chevy-volt.com .) As for Ford, we include a report today that is typical of the company's approach: skepticism with an unfounded confidence that no matter how long it waits, it can catch up.

Toyota cuts 2009 sales f'cast, speeds up electric cars Reuters 08.28.08, 5:35 AM ET Japan - (Update with details on electric vehicles, European shares) By Chang-Ran Kim, Asia autos correspondent http://www.forbes.com/­reuters/­feeds/­
reuters/­2008/­08/­28/­2008-08-28T093544Z_01_T6192_RTRIDST_0_TOYOTA-UPDATE-3-PICTURE.html

TOKYO, Aug 28 (Reuters) - Toyota Motor Corp (nyse: TM - news - people ) cut its 2009 vehicle sales forecast by nearly 7 percent as high fuel prices hammer demand for large cars and pickup trucks, and said it will speed up the rollout of hybrid and electric cars as their popularity grows.

The weaker outlook from the world's most profitable carmaker weighed on shares of European rivals and highlighted an increasingly difficult environment, where orders in the United States and Western Europe for high-margin, gas-thirsty vehicles is slumping.

Toyota said on Thursday it expects to sell about 9.7 million vehicles next year including its Daihatsu Motor Co and Hino Motors Ltd units. It had previously forecast sales of 10.4 million vehicles. No carmaker has yet passed the 10 million annual unit sales milestone.

"We are looking at the current shift towards fuel-efficient cars (in the United States) as a structural change in demand," Toyota President Katsuaki Watanabe told a news conference. "We intend to respond quickly and flexibly to this environment."

As part of those efforts, Toyota said it would move forward the launch of a "plug-in" version of its Prius gasoline-electric hybrid car, which can recharged through an electric socket. It will be available to fleet customers at the end of next year, from earlier plans of 2010.

Toyota also said it would speed up the development of vehicles that run only on electricity with the aim of mass-producing them in the early part of next decade. Road tests for the current prototype, called "e-com", had ended in 2006.

See also stories in
Bloomberg
http://www.bloomberg.com/­apps/­news?pid=20601082&sid=adfMQ5wgKTGQ&refer=canada
and Associated Press
http://ap.google.com/­article/­ALeqM5ioVfPOx0cSZqRPwsBkEfF5TiLkkwD92R79500

Meanwhile, here's Ford:

Ford CEO Alan Mulally echoes other executives at the company who are not looking at the PHEV as a moving target; he adds "miniaturization" of the battery as an issue no other automaker has raised as a problem; and in talking about "two power trains," and "where the electricity comes from," he sounds like industry experts five years ago.

Real key to viable hybrid is in its battery, says Ford
The Age: Business News in Australia by Ian Porter, August 28, 2008
http://business.theage.com.au/­business/­
real-key-to-viable-hybrid-is-in-its-battery-says-ford-20080827-443i.html

FORD Motor Company is staying resolutely sceptical about hybrid vehicles despite having two in the US market and being about to launch another pair next year.

Instead, the company was pouring its efforts into improved internal combustion engines — almost every engine in the group will be renewed by 2010 — while keeping a watching brief on electric cars, said global chief executive Alan Mulally during a visit to Melbourne.

Mr Mulally said Ford was the first US car maker to produce a hybrid in the US and said it had always been "in the forefront on electrification".

"Clearly, hybrids have a long way to go to be competitive, cost-wise, because they are carrying two power trains," Mr Mulally said. "We are going to continue to evolve the hybrid."

Mr Mulally said that, besides cost, the big issue with electric cars was where the electricity came from.

Ford was running pilot programs with some electricity generators in the US using hybrids and plug-in vehicles to see how they fared in the real world. He said the idea of electric cars was "compelling" if we could figure out how to generate electricity in a clean way, and also get the electrical grids to be able to support the extra drain on power. "But the real key is the battery," he said. "We have to make significant improvement in miniaturisation of batteries, the capability and safety of them to make them viable."

Mr Mulally said many companies were making demonstration hybrids and electric cars, but he suggested that these models were further away from being viable than they appeared. Asked about General Motors' Chevrolet Volt plug-in, Mr Mulally said: "The (electric vehicles) being talked about are not mass-produced, large-volume models. "Do we know the pricing of the Volt? Do we know the cost to make them? GM has said they will make them even if they lose money on each one."

Mr Mulally said there was a lot of improvement to come from the internal combustion engine, and that's where a lot of Ford's investment was going as it transformed its US manufacturing operations. These technologies held out the prospect of a 25% fuel saving and 15% drop in emissions, he said. "Our EcoBoost strategy is to get them across all the vehicles as quickly as we can." Ford would then build on those fuel savings by focusing on aerodynamics and weight reduction, Mr Mulally said.