WESTLAKE VILLAGE, Calif. --- Hybrid vehicles are on course to achieve record sales in 2007, increasing by 35 percent compared with 2006, according to the J.D. Power and Associates 2007 U.S. Hybrid Vehicle Forecast Second Quarter Update. According to the report, an estimated 187,000 hybrid vehicles were sold in the U.S. market through the first half of 2007, accounting for 2.3 percent of the total U.S. new light-vehicle market through June. While sales of hybrid vehicles are projected to decline slightly in the second half of the year, the market is still on track to sell 345,000 hybrids in 2007 ---a 35 percent increase from the 256,000 hybrids sold in 2006. "High gas prices during the first half of 2007, coupled with automakers lowering the price premium for most hybrid models, have given the hybrid market a boost," said Mike Omotoso, senior manager of global powertrain forecasting for J.D. Power and Associates. The Toyota Prius continues to be the most popular hybrid model, selling 94,503 units through June 2007 and representing 50.6 percent of all new hybrid vehicles sold in the U.S. market in 2007. Prius sales were bolstered earlier this year when Toyota began offering incentives up to $2,000 to entice customers. "Toyota realized that they had to offer incentives for the Prius to offset the decrease in the federal tax break, which decreased from more than $3,000 in 2006 to less than $1,000 in 2007," said Omotoso. "The incentives helped Toyota maintain a strong sales pace for the Prius." Despite the entry of nine new hybrid vehicle models in the market in 2007 --- seven of which are expected to go on sale between July and December --- the Prius is projected to continue as the sales leader among hybrid vehicles during the next few years. Competition in the hybrid segment is projected to intensify further in the coming years. According to the report, there will be as many as 65 hybrid models --- 28 cars and 37 light trucks --- in the market by 2010, with sales expected to reach nearly 775,000 units, or 4.6 percent of the total U.S. new light-vehicle market. "While consideration for hybrids is falling, interest in hybrids is still strong among consumers, and projections indicate steady growth for this segment in the coming years," said Omotoso. "Bringing additional hybrid models to the market will serve to fuel that interest."