The key to the automobile industry is fuel economy

Rising gasoline prices have made fuel economy a key selling feature of automobiles.  This plot shows the difference in the ability of Ford and Toyota to garner sale price as a function of fuel economy.  Because the federal government regulates the Corporate Average Fuel Economy (CAFE) of automobile manufacturers, the trend in this chart is directly related to the profitability of the manufacturers.  The American Automobile Industry reports that the "legacy costs" to their businesses (retirement and healthcare for its workforce) lead to $1500 in cost per car, and that is the source of their un-competitiveness.  The plot above shows that lower fuel economy leads to a reduced average profitability of Ford of over $5000 per vehicle based on fuel economy.

The reasons for Toyota being able to charge more for its high-efficiency vehicles are left to speculation, but a technology that would allow the American Automobile Industry to increase its average fuel economy by 20% could add $5000 per vehicle to its profits.  The Japanese automakers know this, that is why they are leading the charge with hybrid vehicles.