Chip companies set to drive hybrid vehicle opportunities

The market researchers suggest annual growth of full and mild hybrid powertrains will be 38 percent between 2007 and 2012. The more cost effective mild hybrid solution will see faster growth —, 79 percent — mainly from Honda and European OEMs, although market leader Toyota will have a head start.

However Kevin Mak, Automotive Electronics Analyst at Strategy Analytics (Milton Keynes, England), cautioned the higher cost to consumers and the limitations imposed by current battery technology will for a while hold back hybrid deployment.

"Despite their enthusiasm for environmentally friendly vehicles, consumers are anxious not to pay higher prices during this global recession”, said Mak.

He notes OEMs are developing ways of reducing the break-even period to repay the hybrid premium and thus make hybrid purchases worthwhile. “Tougher emission standards will also drive hybrid development - even European car makers will be involved despite good progress in reducing CO2 using diesel technology.”