Toyota Motor Corporation ( TM - Analyst Report ) has announced that it will introduce a gas-electric hybrid version of its new Avalon sedan. With a capacity for five people, the vehicle will get roughly 40 miles per gallon (mpg) of gasoline on the highway and 39 mpg on the freeway.

The standard version of Toyota Avalon with 3.5-Liter V-6 engine and 268 horsepower will get 25 mpg in combined city-highway and 31 on the freeway. On the other hand, the hybrid vehicle is equipped with two electric motor-generators, gasoline engine and 200 horsepower.

Fuel efficiency plays a major role in determining the choice of vehicles by the consumers. Generally, consumers shift their preference to midsized cars owing to the mileage offered by the vehicle. The new hybrid Avalon runs with a combination of gas and electricity. It can go on for one mile with 25 mpg solely on electric source.

The new hybrid Avalon with advanced technology and stunning design ensures both high level of comfort and dynamic performance to its customers. Toyota expects higher sales owing to the launch of the new hybrid Avalon. The vehicle will be manufactured in the U.S. and will be more efficient than the existing model which is priced at $33,195.

Toyota’s major competitor Ford Motor Co.’s ( F - Analyst Report ) 2013 Ford Taurus with a new 2.0-liter EcoBoost four-cylinder engine has been empowered to deliver 32 mpg on highway. Recently, Taurus has been certified by Environmental Protection Agency (EPA) as the class leading in a large sedan city and as a highway fuel efficient vehicle.

Japan-based Toyota is the leading automaker in the world in terms of sales and production. Its product portfolio consists of a full range of models from passenger cars, mini vans and trucks as well as related parts and accessories. The company’s other competitors include General Motors Company ( GM - Analyst Report ) and Honda Motor Co. ( HMC - Analyst Report ) .

Toyota Motor occupies the number one position in hybrid cars market. It focuses on hybrid and environmental-friendly vehicles such as electric and fuel cell vehicles with the vision of enriching the people’s traveling experience with improved technologies.

Currently, Toyota retains a Zacks #1 Rank, which translates into a short-term (1 to 3 months) “Strong Buy” rating. We have a long-term (more than 6 months) “Outperform” recommendation on the stock.