Japan's top automaker will produce the hybrid model of the Camry at its plant in Kentucky as early as next year, the business daily Nihon Keizai Shimbun said.

Toyota believes US demand for hybrid cars will increase sharply amid worries over rising gasoline prices, the daily said, adding US sales of hybrid cars soared 80 percent last year.

Hybrid cars are equipped with an electric motor and a standard petrol engine, making them much more economical and environment-friendly than conventional gasoline engines.

Toyota's Prius, the world's first mass-produced hybrid car, emits 50 percent less carbon dioxide than a regular car with an engine size of 1.8 litres. Carbon dioxide is believed to be a major factor in global warming.

The business daily said Toyota was also considering making the Prius or other hybrid sports utility vehicles (SUVs) in the United States in 2007.

In US passenger car sales last year, Toyota's Camry ranked first, selling some 420,000 units, while the Prius controls some 65 percent of the US hybrid car market.

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