"I would say there's no future for the auto industry without fuel cell cars," Takeo Fukui, the president of Japan's second-largest automaker, said at a conference in Tokyo on the auto industry.

"We are making significant efforts in the development of fuel-cell cars," he said, presenting video footage of its trial-based FCX Concept, a stylish sedan with low height and smooth curve lines.

Japanese automakers have achieved major success by pioneering eco-friendly cars including hybrids, which have appealed to US consumers at a time of high oil prices.

Fuel cells produce electricity through a chemical reaction between hydrogen and oxygen, leaving water as the only by-product.

Leading automakers have been designing hydrogen fuel-cell cars, but the high price -- at more than 100 million yen (840,000 dollars) a vehicle -- has been a steep barrier to commercialisation.

Honda plans to begin leasing a pricey new hydrogen-powered fuel-cell car in Japan and the United States next year.

"I expect that fuel cell vehicles will come very close to a mass production in 10 years' time," Fukui said.

"For example, if the sales price of fuel cars goes down below 10 million yen (87,700 dollars), then customers who now buy German luxury cars will shift to fuel cell cars," he said.

US automakers have also increasingly looked to eco-friendly models.

Recovering giant General Motors, which is edging back ahead of Japan's Toyota Motor Corp to be the world's top-selling automaker, unveiled a plug-in hybrid vehicle in January.

The car, the Chevrolet Volt, would run only on electricity until the battery runs out.

But the Honda chief questioned the future of such vehicles, saying the cars would not go far without additional charging or a massive battery.

"We tried mass production three years ago of a battery vehicle, on which we made significant technological progress from a model 10 years ago," Fukui said.

"Yet that level wasn't at all enough to realise a battery vehicle," he said. "That's why we're doing fuel cell."