While Japanese and Korean car makers have long been making cars with hybrid fuel and electric-powered engines, European groups such as Germany's Volkswagen and DaimlerChrysler have shown scant interest in the fuel-saving technology up until now.

However, in the run-up to the IAA motor show here, one of the most important shows in the world after Detroit, Paris and Geneva, German car makers have been falling over themselves to unveil a series of alliances to develop hybrid engines in the name of ecology.

"In view of rising fuel prices and a growing interest in sustainable environmental protection via lower greenhouse gas emissions, the outlook for sales of hybrid vehicles is very favourable," said PwC's auto expert Paul McCarthy.

PwC forecast that sales of hybrid vehicles could top the one-million mark by 2010 and the number of models using the technology would grow from just three in 2000 to 74 by the end of the decade.

The fast-growing Chinese market was particularly interested in the technology, which would ease already strained natural resources and cut down emissions of so-called greenhouse gases, PwC noted.

And German car giant Volkswagen, seeking to regain valuable lost market share in China, was quick to sense an opportunity.

It announced it planned to develop a hybrid car for the Chinese market that could be launched commercially in three years.

"By developing a hybrid vehicle in China, we are supporting the efforts by the Chinese government to develop alternative technologies and save resources," said the head of VW's Chinese arm, Volkswagen Group China, Winfried Vahland.

Other car makers have similarly discovered their ecological conscience and are looking at ways to develop the technology.

DaimlerChrysler has announced that it is joining forces with General Motors in the area of hybrid engines.

And then German rival BMW said last week it would become the third partner in that project.

"The objective is to jointly develop a two-mode hybrid drive system that reduces fuel consumption while not compromising vehicle capability," the three car makers said. To this end, they were setting up a "Hybrid Development Center" in Troy, Michigan.

On Monday, the first day of the IAA, VW's luxury car arm Audi said it had been collaborating with its parent company and luxury sports car maker Porsche in the area of hybrid engines for some time.

And to hammer home its point, Audi unveiled a hybrid-powered version of its new sports utility vehicle (SUV), Q7, at the motor show.

Consumer pressure for greener cars certainly appears to be growing in Germany.

The German automobile club VCD publishes an annual hit-list of the most environmentally friendly cars and only one German model, the Opel Corsa ECO made it into the top 10 this year.

Instead, Toyota, Daihatsu and Suzuki dominated.

And Toyota is determined to keep hold of its lead in the market, with its chief Katsuaki Watanabe vowing Tuesday to slash the price of such vehicles and targeting unit sales of around one million by 2010.

German Environment Minister Juergen Trittin also turned up the heat on domestic car makers on Tuesday.

As a member of the environmentalist Green party, Trittin's relationship with the auto industry has never been an easy one.

But he slammed car makers for continuing to build fuel-guzzling models that were fast going out of fashion.

"My interest is that the German auto industry remain competitive. It can do so by making fuel-saving cars, not big fuel-guzzlers that the market doesn't want," Trittin told the daily Sueddeutsche Zeitung in an interview. And he took aim at VW in particular.

"At a time when China is introducing upper limits for fuel consumption and only gas-powered taxis are only allowed in New Delhi, VW is rolling out a Bugatti that guzzles 100 litres of fuel," the minister fumed.

"That's a mistake that encapsulates the essence of the crisis at VW," he said.

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