INTRODUCTION

    The Freedonia Group Incorporated is a leading international industry study/database company.  Since 1985, Freedonia has published more than 2,000 titles covering areas such as building materials, chemicals, communications, health care, packaging, pharmaceuticals, plastics, security and many other industries.  Studies cover entire industry sectors as well as key niche markets.  Each study includes such valuable intelligence as growth markets and products, market share, product analyses and forecasts, market analyses and forecasts, and company profiles.

    This study analyzes the world market for light hybrid-electric vehicles (HEVs).  Historical data are provided for 1998 and 2003, with forecasts provided to 2008, 2013 and 2020.  Data are presented for world sales of HEVs by type (full hybrid and mild hybrid) and by segment (passenger car and light truck). Estimates are also provided for HEV production, and HEV component sales. Data is provided by geographical region, including North America, Western Europe, the Asia/Pacific region and other regions of the world.  Within each regional section, vehicle production and demand figures are presented for key nations.  Vehicle demand and production are presented in thousands of vehicles, and components are presented in dollars.  The entire study is framed within the overall industry's economic and market environment. 

    Throughout the study, data are related to indicators in the tables.  This is done for comparative purposes and to facilitate further analysis.  Details in the tables may not add to totals due to independent rounding, and calculated ratios may reflect unrounded numbers.  Macroeconomic and demographic indicators in this study were obtained from The Freedonia Group Consensus Forecasts dated June 2004.  Motor vehicle indicators presented in this study were obtained from The Freedonia Group Consensus Forecasts dated August 2004.  Studies on related topics published by The Freedonia Group include #1841 Automotive Aftermarket in North America (10/2004), #1831 World Batteries (9/2004), #1777 OEM Automotive Electronics in North America (2/2004), #1726 World Motorcycles (9/2003), #1674 World Automotive Aftermarket (5/2003),  #1667 World Fuel Cells (5/2003), and #1617 Hybrids & Competing Automotive Powerplants (11/2002).

    Information and data on HEVs were obtained from a variety of sources including government and trade associations, industry participants, online databases and other Freedonia studies.  Primary information was gathered through consultations with officers and marketing/technical personnel of participating companies and other industry specialists.  Secondary data and background information were obtained from various trade publications, including  Automotive Engineering,  Automotive Industries, Automotive News and Ward’s Automotive,  among others, as well as online database searches.  Corporate annual reports, SEC Form 10-K filings, product catalogs and other company information were also used extensively in framing the industry and market environments and as inputs for market size assessments.

TABLE OF CONTENTS
SECTION     PAGE

I.  EXECUTIVE SUMMARY 

II.  MARKET ENVIRONMENT 
General   
World Economic Overview
World Population Overview
Households Per Region 
World Light Vehicle Overview 
Light Vehicle Production 
Light Vehicle Sales 
Automotive Components Industry Trends 
Environmental & Regulatory Factors 
Pricing Trends   

III. TECHNOLOGY  
General   
Transition to Fuel Cells 
Well-to-Wheels Efficiency & Pollution Comparisons 
Hybrid-Electric ICE Powerplants 
Series Hybrid   
Parallel Hybrid 
Mild Hybrid   
Advantages of the Hybrid-Electric ICE Powertrain 
Hybrid-Electric ICE Commercialization Issues 
Heat Management 
Power Control Systems 
Field Service  
Battery Life  
Internal Combustion Engines 
Spark Ignition Internal Combustion Engines 
Diesel Internal Combustion Engines
Fuel Cells  
Energy Storage Technologies 

IV.  COMPETITIVE & MARKET ASSESSMENTS 
General  
Competitive Assessment 
Technology Readiness 
S-Curve Headroom 
Internal Combustion Engines 
Hybrid-Electric ICEs 
Fuel Cells  
Electric Vehicles 
Regulatory Compliance 
Emissions Compliance 
Fuel Efficiency Compliance 
Safety Compliance 
Infrastructure Readiness 
Fueling Infrastructure 
Service Infrastructure 
Consumer Price/Benefits 
Industry Focus  
Technology Penetration Profiles 
Market Pull  
Regulatory Push 
Rapid Penetration 
Niche    
Market Assessment 
Automatic Transmissions  
Power Steering  
Air Conditioning  
Antilock Brake Systems  
Penetration Summary  
Penetration Analysis for HEVs  

V.  WORLD OVERVIEW 
General    
Supply & Demand Trends 
Hybrid-Electric Vehicle Demand by Region 
Light Hybrid-Electric Vehicle Supply by Region 
Light Hybrid-Electric Components Demand by Region 
Foreign Trade  

VI.  NORTH AMERICA 
North America: General 
North America: Light HEV Demand by Segment & Type 
North America: Light HEV Supply by Country 
North America: Light HEV Component Demand 
United States  
Canada     
Mexico    

VII.  WESTERN EUROPE 
Western Europe: General 
Western Europe: Light HEV Demand by Segment & Type 
Western Europe: Light HEV Supply by Country 
Western Europe: Light HEV Component Demand 
Germany  
France  
United Kingdom 
Italy 
Other Western Europe 

VIII.  ASIA/PACIFIC 
Asia/Pacific: General 
Asia/Pacific: Light HEV Demand by Segment & Type 
Asia/Pacific: Light HEV Supply by Country 
Asia/Pacific: Light HEV Component Demand 
Japan  
China 
South Korea 
Other Asia/Pacific 

IX.  OTHER REGIONS 
Other Regions: General 
Other Regions: Light HEV Demand by Segment & Type 
Other Regions: Light HEV Supply by Region 
Other Regions: Light HEV Component Demand 
Latin America   
Eastern Europe  
Africa/Mideast 

X.  INDUSTRY STRUCTURE 
General    
Industry Composition & Market Share 
Mergers, Acquisitions & Industry Restructuring 
Research & Product Development 
Manufacturing  
Marketing   
Distribution  
Financial Issues & Requirements 
Strategic Partnerships 
Company Profiles 
AeroVironment Incorporated 
AC Propulsion Incorporated 
Aisin Seiki Company Limited 
Alcatel  
Ballard Power Systems Incorporated 216
Bayerische Motoren Werke AG 
Bosch (Robert) GmbH 
Continental AG 
DaimlerChrysler AG 
Delphi Corporation 
DENSO Corporation 
Eaton Corporation 
Exide Technologies 
Ford Motor Company 
Freescale Semiconductor Incorporated 
General Motors Corporation 
GS Yuasa Corporation 
Hino Motors Limited, see Toyota Motor Corporation 
Honda Motor Company Limited 
Hyundai Motor Company 
iPower Technologies Incorporated, see AeroVironment Incorporated 
Japan Storage Battery Company Limited, see GS Yuasa Corporation 
Matsushita Electric Industrial Company Limited 
Mazda Motor Corporation 
Motorola Incorporated 
Nissan Motor Company Limited 
Panasonic EV Energy Company Limited, see Matsushita
Electric Industrial Company Limited and Toyota
Motor Corporation
Peugeot SA  
Saft    
SANYO Electric Company Limited 
Siemens AG  
Toyota Motor Corporation 
Valeo SA   
Volkswagen AG 
Other Companies Mentioned in Study  

LIST OF TABLES
TABLE NUMBER PAGE

SECTION I -- EXECUTIVE SUMMARY
Summary Table  

SECTION II -- MARKET ENVIRONMENT
1 World Gross Domestic Product by Region 
2 World Population by Region 
3 World Households by Region 
4 World Light Vehicle Production 
5 World Light Vehicle Sales 
6 World Automotive Components Demand 

SECTION V -- WORLD OVERVIEW
1 World Light Hybrid-Electric Vehicle Supply & Demand 
2 World Light Hybrid-Electric Vehicle Demand by Region 
3 World Light Hybrid-Electric Vehicle Supply by Region 
4 Hybrid-Electric Components Demand by Region 

SECTION VI -- NORTH AMERICA
1 North America Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
2 North America Light Hybrid-Electric Vehicle Demand by Segment & Type 
3 North America Light Hybrid-Electric Vehicle Production by Country 
4 North America Light Hybrid-Electric Vehicle Component Demand 
5 United States Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
6 Canada Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
7 Mexico Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 

SECTION VII -- WESTERN EUROPE
1 Western Europe Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
2 Western Europe Light Hybrid-Electric Vehicle Demand by Segment & Type
3 Western Europe Light Hybrid-Electric Vehicle Supply by Country 
4 Western Europe Light Hybrid-Electric Vehicle Component Demand 
5 Germany Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
6 France Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
7 United Kingdom Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
8 Italy Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
9 Other Western Europe Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 

SECTION VIII -- ASIA/PACIFIC
1 Asia/Pacific Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
2 Asia/Pacific Light Hybrid-Electric Vehicle Demand by Segment & Type 
3 Asia/Pacific Light Hybrid-Electric Vehicle Supply by Country 
4 Asia/Pacific Light Hybrid-Electric Vehicle Component Demand 
5 Japan Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
6 China Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
7 South Korea Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
8 Other Asia/Pacific Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 

SECTION IX -- OTHER REGIONS
1 Other Regions Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
2 Other Regions Light Hybrid-Electric Vehicle Demand by Segment & Type 
3 Other Regions Light Hybrid-Electric Vehicle Supply by Region 
4 Other Regions Light Hybrid-Electric Vehicle Component Demand 
5 Latin America Macroeconomic Indicators & LightHybrid-Electric Vehicle Supply & Demand 
6 Eastern Europe Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 
7 Africa/Mideast Macroeconomic Indicators & Light Hybrid-Electric Vehicle Supply & Demand 

SECTION X -- INDUSTRY STRUCTURE
1 Selected Cooperative Agreements 

LIST OF CHARTS
CHART NUMBER PAGE

SECTION III -- TECHNOLOGY
1 Conceptual Technology Migration Profile: ICE to Fuel Cell 

SECTION IV -- COMPETITIVE & MARKET ASSESSMENTS
1 Options for Improving Light Vehicle Fuel Efficiency 
2 Honda Civic Hybrid Breakeven Versus Civic ICE LX Model, US Market Example, 2004 Data 
3 Probable HEV Market Penetration Profile 
4 Alternative Powerplant Forces at Work 
5 Light Vehicle Powerplant Technology Assessment 
6 Price/Benefits Analysis -- 2003-2005 Model Year 
7 HEV Price/Benefits Analysis -- 2003-2005 Model Year 
8 Categorizing Technology Penetration Curves 
9 Framework for Assessing Automotive Technology Penetration  
10 Automatic Transmission Penetration at Retail Price Analysis 
11 Power Steering Penetration at Retail Price Analysis 
12 Air Conditioning Penetration at Retail Price Analysis 
13 Antilock Brake System Penetration at Retail Price Analysis 
14 Summary of Technology Penetration Profiles US Example 
15 Estimated Full Hybrid-Electric Vehicle Option Pricing Trend  

SECTION V -- WORLD OVERVIEW
1 World Light HEV Demand by Region, 2008-2020 

SECTION VI -- NORTH AMERICA
1 Historical & Potential Light HEV Introductions, North America Through 2008 

SECTION VII -- WESTERN EUROPE
1 Historical & Potential Light HEV  Introductions,Western Europe Through 2008 

SECTION VIII -- ASIA/PACIFIC
1 Historical & Potential Light HEV Introductions,Asia/Pacific Through 2008 

SECTION X -- INDUSTRY STRUCTURE
1 Forecast World Hybrid-Electric Vehicle Market Share, 2008 
2 Trigger Technology Definition -- Antilock Brake System Example 
3 Hybrid Vehicle Technologies with Multiple Possible Applications