General Motors Vice Chairman Robert Lutz said the automaker missed an opportunity to market itself as a technologically savvy company capable of producing hybrid vehicles.
Lutz said GM "missed the boat" on a marketing opportunity with hybrids -- an opportunity Toyota Motor Corp. has played to its advantage.
"We business-cased it, took a hard, analytical look and thought the engineering and investment were irresponsible vis-a-vis our shareholders," he said.
"We failed to appreciate what Toyota has basically treated as an advertising expense."
Lutz said GM was doubtful the business case for hybrids would work.
In hindsight, "we should have said, 'We'll lose $100 million a year on hybrids, but we'll take our advertising budget of $3 billion, make it $2.9 billion and treat it as an advertising expense,' " he said.
While Lutz said he finds it hard to view product as a form of advertising, "Toyota very cleverly has used hybrids to gain an improved perception of the brand."
While Toyota continues to sell more hybrids each year -- Toyota sold 53,991 hybrids in 2004, more than twice the 24,627 it sold in 2003 -- GM is just starting to unveil its hybrid technology in its full-sized trucks.
Peter Savagian, GM's engineering director for hybrid powertrains, says GM sold 500 retail hybrids in the western states and Florida in 2004.
Savagian says GM wants to sell 2,500 across the United States in 2005.
Lutz said the hybrid market has room to grow.
"Since we've made a major commitment, I don't want the market to go away."