Will Toyota overwhelm GM? (GM, TM)

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 |  Includes: GM, TM
by: Douglas McIntyre

Fortune and its online counterpart money.cnn.com recently ran articles assuming that because Toyota has built a significant lead in hybrids this will allow it to "dominate the industry for years to come". In journalism school they try to teach that making overly broad statements that you can't possibly defend with facts is a bad idea.

First, the same article points out that the hybrid engineering adds about $3,000 to the cost of a car. It takes a lot of driving to get that back.

Beyond that, if you look at the literature about oil reserves, there isn't much evidence that anyone will have to have a hybrid soon. In an article at the BBC website (news.bbc.co.uk), on of their business reporters, Will Smale, makes the point that with new technology and the discovery of new reserves we have decades of oil left in the ground. He quotes Chris Hayes of Cambrian Group as saying"we have potentially got another 100 years of old production."

Will hybrids or cars that don't run on gas at all be necessary in the future? You bet.

Is Toyota a formidable competitor for all the American car companies? Absolutely.

But, let's not confuse their lead in a technology that is fairly expensive for the consumer and where the large demand may be decades away with the real issues of the cost of building cars and creating quality products for the market.