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UPDATE 1-Ford talks to Toyota on hybrid vehicles -WSJ

(Adds background, comment from Toyota in Japan)

NEW YORK, July 30 (Reuters) - Ford Motor Co. , the world's number two automaker, is looking at how to offer Volvo, Land Rover, Mazda and some of its other brands with electric-gasoline "hybrid" engine systems, the Wall Street Journal reported on Tuesday.

The paper said talks had taken place with Toyota Motor Corp on a possible engine technology collaboration.

Toyota and Honda Motor Co are the world's only automakers to sell hybrid vehicles which combine an internal combustion engine with an electric motor to make them up to twice as economical in fuel as ordinary cars of the same size.

To reduce the cost of this still-developing engine technology, Ford has been negotiating with Toyota and certain suppliers, the paper quoted a Ford spokesman as saying.

The aim would be to create a pool of common hybrid parts, which would cut costs, and potentially make gas-electric hybrid vehicles a growth opportunity for the automaker, the paper said.

Ford plans to start producing a hybrid version of the Escape sport-utility vehicle in late 2003.

Toyota, which made its name as the world leader in hybrid technology in December 1997 when it launched the Prius, has set itself a goal of producing 300,000 of the eco-friendly cars a year by 2005 or 2006.

The world's third largest automaker has held discussions with other automakers about supplying hybrids to them in order to meet its ambitious production targets but has declined to name its potential partners.

"We are in talks with many automakers but things have not progressed to the stage where we can make an announcement," a spokesman for Toyota in Tokyo said.

The Journal said that Toyota acknowledged the talks with Ford but offered few details.