Hybrid technology is trying to muscle in on Europeans' love of diesel cars in a struggle to set the standard for powering the next generation of vehicles.
But there is little doubt that diesel engines remain for now the technology of choice for many Europeans who are drawn by the frugal consumption, durability and relatively lower fuel costs.
Executives have painted sharply different visions of whether the hum of battery-assisted hybrid engines could eventually push aside the purr of new diesel motors while much-hyped hydrogen-powered cars remain stuck in the laboratory.
Eckhard Cordes, head of DaimlerChrysler's premium Mercedes Car Group, said: "We are convinced that the future of diesel is just beginning."
Mr Cordes outlined ambitious plans to expand Mercedes-Benz' diesel line-up 70 years after it became the first car maker to offer diesels as standard equipment.
"There is a clear trend towards the clean, economical and sporty diesel engine," he said. "Over the past few months, registrations of diesel-powered passengers cars across Europe as a whole outstripped petrol vehicles for the first time."
But Yoshio Ishizaka, executive vice president of the world's second-biggest car maker Toyota, disagreed.
He said: "Hybrid is really not an intermediate technology. We think hybrid is the technology we have to see for the future."
Mr Ishizaka predicted it would become the global standard and eventually even power sports cars.
Toyota is enjoying enormous success with its hybrid Prius car in the United States, where some Hollywood stars have established their environmentalist credentials by driving the model and regular customers still joint waiting lists to get one.
Hybrid vehicles typically pair a gasoline engine with batteries to boost fuel efficiency, letting them move along at low speeds on electrical power alone.
But this added efficiency puts them just on par with cutting-edge diesel engines.
The popularity of diesels in the US market remains constrained by environmental standards, access to fuel and many customers' perception that they belong in trucks, not cars.
Toyota increased its Prius sales target in Europe to 20,000 this year from the previous goal of 15,000 and against 8,200 in 2004.
It aims to sell 300,000 hybrids around the world in 2006.
Such economies of scale help offset the added cost of making hybrids and allow Toyota make a profit on the models.
It is working hard to boost the percentage of diesel-powered cars it sells in Europe, which currently accounts for around 36 per cent of its sales.
It is also rolling out a new 2.2-litre diesel motor it makes in Poland.
Other Asian car makers like South Korea's Hyundai and Japan's Honda are also pushing to beef up European sales by offering more diesels.
Shigeru Takagi, head of Honda's Europe operations, said a diesel-powered version of the Civic compact is due in early 2006 and the launch of diesel versions of the CR-V off-roader and the FR-V minivan in 2005 would drive sales growth.
It expects one-third of the new Civic brands sold to use diesel-powered engines, he said.
Meanwhile, Jaguar is using diesel to fuel sales growth in Europe, although parent company Ford too is looking to outfit some of its sleek Jaguars and Land Rover off-roaders with hybrids.
Joe Greenwell, who is chairman and chief executive of both companies, said: "We are not talking about next year or even the year after that, but within a five-year timeframe I do anticipate that Jaguar and Land Rover would be looking at having a hybrid version."
