At the Chicago Auto Show ABG had the chance to sit down with Toyota's Bob Carter and Jaycie Chitwood. Bob is currently the Group VP for the Toyota Division and Jaycie is the Senior Strategic Planner. We talked about a range of issues including hybrid marketing, diesel, ethanol, hydrogen and weight reduction.

ABG: In production applications Toyota were obviously the pioneers in bringing hybrid vehicles to the mainstream and everybody is scrambling to catch up and get their own hybrids and other alternative drivetrains to market. Moving forward, obviously, you have applied your hybrid synergy drive to a wide a variety of Toyota and Lexus vehicles. Let's start by talking a little bit about where you are today and where Toyota is going in the next five to ten years?

BC: Okay, where we are today. Six hybrids, three Toyotas, three Lexus. We are really pleased with the progress. Total we did 278,000 units last year. Prius had a tremendous increase, up 67 percent. We had a 44 percent increase overall in hybrids. We first brought Prius to the U.S. in 2000. As you are aware Prius was actually introduced in Japan in 1997.

There were a lot of people who were just scratching their heads. They did not really understand it. A lot of criticism on hybrid, why they are doing that. Back in 2000, fuel prices were under $1.50 a gallon and there was not nearly the concern on supply and concern on the environment was there but was not really, in my view, embedded in the society the way it is today.

We introduced the first generation. It did well. It attracted the early adoptors that we were primarily interested in environmental impact. We also had people that were attracted by the technology. What is so encouraging to walk around this show is when we look at 2007, the 278,000 hybrids, it has gone beyond the initial adoptors. It's starting to embed itself within the general market and 11 percent, I am talking in terms of Toyota division which I represent, of our total sales last year were hybrid. Yet less than 2 percent of the industry was hybrid.

The conversation continues below the fold.