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But one problem continues to hold the franchise back -- a U.S. inventory chain with a few holes in it,

"Rather than trying to assess market needs from here at our headquarters or relying on our retailers to guess, we're designing a new approach to make sure we can deliver the right car at the right place at the right time." The process will give Nissan's sales regions more voice in production planning and make it easier for dealers to find cars in the factory order banks.

The strategy underscores how Toyota is playing catch-up in a fundamental field, as rivals gain on the automaker's top fleet average fuel economy in the United States with big advancements in such fuel-saving technologies as direct injection, turbocharging and stop-start systems. For years, Toyota has focused on its best-selling gasoline-electric hybrid systems. It hasn't abandoned that track.

Toyota is seeking fuel economy increases of up to 30 percent and cost cuts on key components of up to 50 percent.

"Just like putting something beautiful on top of your hairdo, by using kanzashi through such things as turbocharging or downsizing, you can improve the performance of the engine."Kanzashi add-ons may include direct fuel injection, exhaust gas recirculation systems or stop-start technologies that turn off the engine when the vehicle stops.

The EPA's annual report on fuel economy trends, which calculates automakers' fleet average fuel economy based on sales, shows Toyota losing ground to rivals such as Nissan and Mazda. For example, in 2010, Toyota's U.S. fleet average fuel economy was 25.4 mpg. In 2013, it was 25.2 mpg. Meanwhile, Mazda improved from 24.4 mpg in 2010 to 27.5 mpg in 2013, and Nissan rose from 23.3 mpg to 24.6 mpg during the period.

"Eventually we think this is where the technology is going, but right now we don't know what the reaction of U.S. customers will be," he said. "So probably right up until the last moment, we will have to be ready with both and watch customer feedback."

Research Association of Automotive Internal Combustion Engines. It pools the resources of Toyota Motor Corp., Nissan Motor Co., Honda Motor Co., Mazda Motor Corp., Mitsubishi Motors Corp., Daihatsu Motor Co., Suzuki Motor Corp. and Fuji Heavy Industries Ltd., the maker of Subaru-brand vehicles.

The objective is to share costs in an increasingly competitive, investment-heavy field to meet more stringent fuel economy guidelines, organizers

The strategy is patterned after a similar approach taken by competitors in Europe, organizers said. There, rivals cooperate with academia and the government on basic technologies, giving European carmakers a head start in cutting costs.

While Japanese automakers have developed advanced electric and hybrid drivetrains, the creation of AICE acknowledges that internal combustion engines will remain the workhorse of global fleets for a long time, especially in cost-sensitive emerging markets.

Organizers outlined a 10-year time frame for achieving world-leading advancements in combustion engine efficiency.

Engineers target thermal efficiency rates for both approaching 50 percent. That compares with today’s best rates of around 39 percent for gasoline engines and 42 percent for diesel engines. Higher thermal efficiency means more energy from internal combustion is captured for higher engine output. Organizers said such a breakthrough could boost the fuel efficiency of gasoline and diesel engines 30 percent by 2020.

Diesel engine development will focus on eliminating particulate matter and nitrogen oxide emissions, partly through better particulate filters and exhaust gas recirculation systems. Gasoline engine research will focus on achieving more complete combustion cycles and better ignition while reducing knock.

Keiji Ohtsu, managing officer of Honda R&D Co., Honda’s product development arm, will be AICE president.

Bollore’s Bluecars, used in the Autolib car-share program in Paris, can travel about 150 miles per charge

Batteries made by Bollore’s Blue Solutions in France’s Brittany province are cheaper than lithium ion cells used in other electric cars, holding down the cost of his small vehicles

Along with expanding to other U.S. regions such as California, Bollore said he wants to offer his car-share service and electric vehicles to China and other markets.

But with nearly 900,000 more Sonata owners on the road since the outgoing model's debut, and a chance to build a broader, more sustainable following, "We have to be more careful," Zuchowski said.

But Hyundai says the car's suspension and steering have been redesigned for better ride and handling. The interior also is new, with greater use of soft-touch materials and more countermeasures against road noise. Also, high-tech features and advanced safety equipment -- plus a starting price that Zuchowski says won't stray far from the outgoing model's sticker of just over $22,000, with shipping -- will help the Sonata retain the value image that has been a key purchase reason for the sedan, Hyundai says.

With 6.6 million Camrys on the road, Toyota understands well the delicate balance Hyundai is seeking. The Camry's large, loyal following has allowed it -- compelled it -- to stick with safe, modest designs and driving characteristics, generation after generation.

But when the current generation was launched in late 2011, mostly to yawns from auto critics, the sportier SE model became the best- selling trim package. Toyota took the hint.

Every piece of sheet metal except the roof has been changed, as have more than 2,000 part numbers. For some automakers, that constitutes a redesign.

Both products will land in a mid-sized market that has been roiled by intense competition, not only within the segment but also from fast-growing crossovers. At 2.6 million units in 2013, sales in the segment grew just 1 percent from the previous year,

No one feels this more than Toyota, which is fighting to continue the Camry's 12-year streak as America's best-selling car against a strong challenge from the Nissan Altima. Toyota has spent more on Camry incentives, yet had a lower mean transaction price, than its top four competitors -- the Altima, Honda Accord, Ford Fusion and the Sonata -- every month since November 2012, according to TrueCar.

Carter hopes the investment in the new-look Camry will allow Toyota to dial back on incentive spending. "One way to lower incentives is to increase demand, and that's what this car is about," Carter said. But if competitors should raise their incentives, Toyota won't sit still. Said Carter: "This is a competitive market. And we're going to compete."

For its seventh generation, Hyundai says the Sonata has “evolved into a more refined premium vehicle” that “provides a luxury feel of a car from the segment above.”

The Sonata became Hyundai’s top-selling car, with sales topping 200,000 units in 2011, 2012 and 2013. But sales have slowed since fresher competing models such as the Honda Accord, Ford Fusion, Nissan Altima and Toyota Camry hit the market, with sales dipping by 12 percent last year and off another 28 percent through the first two months of 2014.

Another worrying trend for Toyota could be slipping owner loyalty.

Camry owners who bought another Camry stayed level, at 30 percent,

Battery models carry electricity in their lithium-ion battery packs while fuel cell vehicles make electricity on board in a chemical reaction between hydrogen and oxygen, with only water vapor as a byproduct. While hydrogen vehicles have a range comparable to gasoline vehicles and need only a few minutes to refuel -- compared with hours for most battery autos -- there are few hydrogen pumps currently open to the public.

California has said it will provide as much as $200 million over the next decade to help open stations across the most populous U.S. state.

Fuel cell autos will need three to five years to build a market presence in California, and at least a decade to get to U.S. sales of half a million or more annually, Lentz said. Still, advances in the technology and an industrywide push, with Daimler AG, General Motors Co. and Nissan also planning to sell fuel cell models, may help the vehicles get a market foothold faster than hybrids, according to Lentz.

Vezel is the car’s Japan-market name. The U.S. name will be announced later, Honda said today.

In the United States, Juke sales have climbed 4 percent this year and Mazda CX-5 demand has surged 95 percent. Sales of the new Subaru XV Crosstrek have totaled 48,216, while Buick Encore sales are 29,195.

Honda plans to source all U.S. Vezels from its new plant in Mexico

A spokesman said Honda wants to establish the gasoline version in the market before deciding on whether to add a hybrid option to the lineup

Honda is also banking on the vehicle to fuel a big surge in U.S. sales. Honda built the new plant in Mexico with capacity of 200,000 units just to make the crossover and the Fit hatchback. More than half of the plant’s capacity will be devoted to the crossover, says Ito.

To price cars competitively, it tried offsetting the cost of its sophisticated mechanics by stripping out features and using entry-level trims in the Passat and Jetta.

ranks 23rd out of 33 brands, with 120 problems reported for every 100 new cars within the first 90 days.

"The Passat is up against a redesigned Nissan Altima, a redesigned Honda Accord and a redesigned (Ford) Fusion - all undercutting VW on pricing," said Alec Gutierrez, an analyst with Kelley Blue Book, which tracks U.S. car values.

The U.S. version is expected to be sourced from Mazda’s new plant in Salamanca, Mexico, which opened earlier this year and makes the Mazda3.

The fourth-generation Mazda2, called the Demio in Japan, will go on sale here in the fall, Mazda said in a statement. It will hit American showrooms in 2015.

U.S. sales of the outgoing Mazda2 surged 42 percent to 7,957 vehicles in the first six months of the year, from 5,594 the year before, as the carmaker cleared out inventories.

But last year, sales of the aging nameplate, which is getting its first full redesign in seven years, slumped 39 percent to 11,757.

That ranked it near the bottom of the subcompact segment, way below such rivals as the Chevrolet Sonic, the Ford Fiesta, the Honda Fit, the Kia Soul, the Nissan Versa, the Hyundai Accent and the Toyota Yaris.

The next Mazda2 will also provide the basis for a new subcompact sedan from Toyota Motor Corp. That car will be made in Salamanca, where Mazda has allocated about 50,000 vehicles for Toyota from its full annual capacity of 230,000 units. While that car will get Skyactiv underpinnings, including a Skyactiv engine, it will have a Toyota-designed body. Output for Toyota is expected to begin after April 1, 2015, but before March 31, 2016.