AP reported that Mazda is developing its own electric car for leasing in Japan starting in spring 2012, joining the rush to develop green vehicles, an area in which it’s lagging General Motors, Nissan and other rivals.

Mazda said that the electric vehicle will be based on the car maker's Demio subcompact, called the Mazda2 overseas, and will have a driving range of 120 miles on a single charge.

Mr Takashi Yamanouchi president & CEO of Mazda Motor Corporation said that "We think time will be needed for electric vehicles to become widespread, but there is a definite need for short range commuters."

It is common for companies in the intensely competitive auto industry to be reticent about revealing business plans, especially on a product that's a year away in coming.

Speculation has been rife that Mazda, a relatively small player, producing 1.2 million vehicles a year, would fall behind in expensive to develop ecological technology after its US partner Ford Motor Co gradually reduced its stake over the years in Mazda to its current level of about 3.5%.

Mazda officials said that they expect electric vehicles to make up about 5% of the world's auto market by 2020. It has other green technologies for gas engines, such as more efficient transmissions and weight reduction, which will make up the majority of sales for some time.

According to Mazda, leasing of its electric vehicle will be mainly to government organizations and company fleet customers, not individuals.

Mr Yamanouchi said that "We have always had the building blocks for our own electric vehicle." On price, he said it will be competitive with other electric vehicles on the market.

But Mazda will be more than a year behind Japanese rival Nissan Motor Co, which has recently begun delivering its Leaf electric vehicle in Japan and the US General Motors has also begun delivering the Chevrolet Volt electric car. Other automakers, including Toyota Motor Corporation, are also planning electric vehicles.

(Sourced from AP)