Mazda and Daihatsu Fight Hybrid Market with Coventional Engines

There isn’t a big carmaker in the world that doesn’t have or isn’t considering building a hybrid or an electric car. However some Japanese smaller competitors are willing to bet that next generations of more frugal petrol engines will appeal to customers much more than the expensive hybrids.

According to a Wall Street Journal article, Mazda and Daihatsu are going to make new-generation gasoline-powered cars boasting enhanced fuel economy and cheaper price tags in order to compete against plug-in cars like the Leaf that’s being unveiled in Japan today.

This gamble might pay off for the companies if gas prices stay at current levels in the near future. "Gasoline prices are relatively stable. They are neither cheap nor expensive. In this environment, electric vehicles or hybrids won't likely become the top popular models immediately.There is a chance in the short-term that compact cars could beat some hybrids" said Koji Endo, analyst at Tokyo-based independent research Advanced Research Japan, referring to pump prices now about 29% below records reached two years ago.

Last year sales of Hybrid vehicles tripled, thanks to high demand for the new Prius and also aided by government incentives for low emissions vehicles. In contrast, the overall market shrank 9.3% as budget-conscious consumers reduced spending, concerned about the fate of Japan's economy.

Development of more efficient petrol engines will only cost the two companies somewhere between less than one-tenth and one-fifth of such spending made by Japan's 'big three' Toyota, Nissan and Honda. With 4.4 and 13 percent of Japan’s car market sales, Daihatsu and Mazda are stuck behind in forth and fifth place for the foreseeable future.