This paper proposes an optimized design of permanent magnet (PM) synchronous motor (PMSM) using hybrid-type PM for improving the output characteristics and reliability. Here, the hybrid-type PM is defined as using both neodymium PM (Nd-PM) and ferrite PM (Fe-PM) in a rotor. First, a basic design of PMSM is conducted by considering the magnetic equivalent circuit and applying the magnetic characteristic of Fe-PM changed by the reversed flux of Nd-PM. For optimizing the motor using hybrid-type PM, parallel configuration of reluctance factors is helpful for increasing the output characteristics, and it is analyzed by using a finite element method (FEM). In addition, by using an algorithm, an optimized design is suggested for obtaining maximum torque. The performances of target and proposed motors are compared through FEM. Next, the irreversible demagnetization of each motor is analyzed at high and low temperature, and the demagnetization phenomenon of two-type motors is compared for verifying the reliability of the proposed motor. Finally, prototypes of reference and proposed models are developed for evaluating the enhanced performance through comparison between the two motors.