Toyota hybrid bet pays off as dieselgate ignites Europe demand

Tokyo

FOR years, Toyota Motor Corp focused on pushing its hybrid models in Europe, avoiding a diesel-for-diesel competition with market leaders including Volkswagen AG. The Japanese carmaker's strategy is finally paying off.

In the first full year since Volkswagen's emissions scandal threw the German giant into disarray, Toyota is on track for roughly a 40 per cent jump in annual sales of petrol-electric vehicles in Europe. Hybrids are set to account for more than half of Toyota's deliveries for the region by the end of the decade, according to Karl Schlicht, executive vice-president of the carmaker's European division.

Toyota's Europe dilemma was a product mismatch rather than a regulatory crisis. At the beginning of the decade, when demand for its Prius was surging in other markets such as the US, the model barely attracted buyers in Europe, where more than half of industrywide sales are diesels. After Volkswagen's scandal undermined those powertrains, Toyota's strategic decision to avoid pitting its models directly against die…