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A new hybrid vehicle system has been developed, the Dual System, which combines the series and parallel hybrid systems. Combination with a motor has reduced the engine size, only using the most efficient range of the engine. A transaxle employing a generator motor and a traction motor in one compact package is applicable to currently produced vehicles with little modification. Use of the generator as a motor realizes multiple control functions. A prototype vehicle with this new Dual System was built and tested. Its driving performance and the fuel economy were measured, and the fuel economy results were analyzed.