Banners two meters tall outside Toyota Motor's sprawling factory in Tsutsumi, Japan, scream "Hybrid," the word emblazoned over an image of the earth. Inside, beneath signs reading "Yoi shina, yoi kangae" ("Good thinking, good products"), assemblers in blue jackets and white gloves turn out about 400 of Toyota's newly designed Prius hybrid sedans every day.

Apart from the signage, it looks much like any other automotive factory floor-and that's what's remarkable. The Prius, which uses both a gasoline engine and an electric motor for propulsion, gets an average of 55 miles to the gallon-about double the mileage of a comparable gasoline car. What's more, the latest model rolling off the factory floor at Tsutsumi doesn't sacrifice power or comfort and sells for only about $1,000 more than a base model of Toyota's mid-size sedan, the Camry.