But do gas-electric engines have Fahrvergnügen?
By Alex Taylor III

(FORTUNE Magazine) – Auto shows are all about speed and sex. Whatever looks great and goes fast is almost always guaranteed to draw a crowd. So it came as a surprise that, when Mercedes-Benz, Porsche, and Jaguar unveiled new ultraluxe sedans and sports cars at the biennial Frankfurt auto show in mid-September, the applause was polite but muted. On the other hand, when Toyota yanked the covers off a couple of budget-priced models (such as its new Yaris), competitors paid them the highest compliment: They hauled out their digital cameras and clicked away like so many Seventh Avenue garmentos knocking off couture designers.

But the deepening respect that the auto world has for Toyota extends beyond the way it does small and cheap. It's clear that rival execs have a bad case of hybrid envy. Competitors used to pooh-pooh the hybrid gasoline-electric motor as an expensive gimmick appealing mainly to tree-huggers. But now that Toyota is on track to sell 400,000 hybrids next year, they've changed their tune. General Motors, DaimlerChrysler, and BMW just announced that they are forming an alliance to develop new hybrid engines. So, too, are Volkswagen and Porsche. Just to make sure the public doesn't get the impression that they are merely imitating Toyota, rival auto execs made it clear that they still don't see hybrids as the technology of the future. GM is betting big on fuel cells, while BMW sees a rosy future in hydrogen power. Asked where hybrids fit into DaimlerChrysler's plans, research boss Thomas Weber dismissed them as a "bridging strategy."

Maybe they weren't paying attention after all. Toyota is now saying that it expects to slash production costs for hybrids to make them more affordable and plans to make them available in every vehicle in its lineup. The hybrid bridge may expand further into the future than the rest of the auto world is ready to concede. Yet. -- Alex Taylor III