NRI Papers
No.114 February 1 , 2007
  Upcoming Advances in the Hybrid Vehicle Market  
Yuki TANAKA, Yukio SHIGETA
   The market for hybrid vehicles has been growing explosively. These vehicles first appeared on the market ten years ago, in 1997, when they were touted as a means of suppressing growing CO2 emissions. Against a background of increased environmental awareness and higher oil prices, 2004 proved to be the second consecutive year in which sales of hybrid cars doubled, and 2005 saw sales reach about 300,000 units.
   Despite these figures, even after being on the market for ten years, hybrid cars still account for less than 2 percent of all new car sales. To determine the factors that would lead to a faster spread of hybrid vehicles, NRI conducted a questionnaire-based consumer survey. As a result, we identified three main factors, namely, (1) lower cost, (2) wider product lineups and (3) more opportunities to actually experience using hybrid vehicles. If manufacturers could respond to these demands, we estimate that the market for hybrid vehicles would rise to 2.2 million vehicles by 2012, while giving birth to a hybrid-related component market amounting to 760 billion yen.
   Unfortunately, however, it is not easy to reduce the cost and size of the components used in hybrid vehicles. If this were to be realized, the vehicle manufacturers and parts suppliers would have to establish some kind of open development system.
Contents
Previous Trends in the Industry
  Hybrid vehicle market expands rapidly as more and more manufacturers make their entry
Current Topics
  Approach varies depending on the manufacturer
Market Prospects
  Reductions in costs and wider product lineups seen as keys to expanding the market
Changes in Industrial Structure
  Market growth offers new opportunities to manufacturers of electrical equipment and components
Suggestions for the Industry
  Motor manufacturers should establish an open development system with related suppliers

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