From BusinessWeek.com - Autos - under hybrids .
News & Features March 8, 2007
Why Hybrids Are Such a Hard Sell
by David Welch
Despite their growing popularity, they still haven't crossed over to the mainstream. Many buyers simply aren't willing to pay the premium ....
Given all the buzz ( hype about hybrids? )
about hybrids, not to mention the greening of the citizenry,
you'd think they would be easy to sell.
They're not. After growing nicely through much of 2006, hybrid sales began to slow early this year.
The gasoline-electric vehicles now make up 1.8% of all vehicle sales, says Edmunds.com, down from a peak of 2.1% in October .
( Hmmmm ......... 14.286% sales decline ....... steady trend for 4 months ....... maybe its time ? ..........
SHUT HER DOWN OLLIE - SHE'S PUMPING MUD ! )
One major reason is that hybrids typically cost $3,000-plus more than conventional cars.
As a result, automakers in recent weeks have been slashing prices.
Less than a year ago, Toyota dealers got full price for the Prius.
Now you can immediately lease one for a slim $219 a month. Ford Motor Co. (F)
is also cutting the price of the latest version of its Escape hybrid.
In fact, in February ( 2007 ), carmakers spent an spent an average of $1,500 on incentives per hybrid, says Edmunds—
triple what they laid out in January ( 2007 ).
Making matters worse, just as hybrid sales start slowing, automakers are gearing up to launch a slew of new models. ( UH OH )
At least 30 hybrids will hit the market in the next 20 months.
That will bring the number to more than 40, up from 12 today, says Boston research firm Global Insight.
"Now that the automakers have tapped the early adopters, they're going after the mass market," says Jesse Toprak, an Edmunds analyst.
"For consumers, the answer is often no."
( Call my broker --- hasn't toyota with a dearth of conventional IC , Fuel Cell , AND advanced AT technology bet the farm on this ? )
Tailing Off
A few years ago, automakers decided to put hybrid technology in regular models.
The hope was to move beyond the geek chic of the Prius and win over everyone else.
Hybrid would be another option, like, say, navigation. If enough people bought hybrids, carmakers figured, they would achieve
sufficient economies of scale to eliminate the big premium over conventional models.
That hasn't happened. And some models have suffered badly . Honda Motor Co. (HMC) sold 70% fewer hybrid Accords in 2006;
Toyota has sold 24% fewer Lexus RX 400h sport-utility vehicles so far this year.
The fuel savings are simply too puny to offset the hybrid premium. With gas at $2.50 a gallon, it would take 10 years to recoup
the extra $3,000 cost of the Accord hybrid. ( Both vehicles have also been criticized for how they drive as well ) ...........
Getting prices down—and not by discounting—is the long-term solution. That means finding a way to make the cars more cheaply.
Batteries account for about half the hybrid premium. But cheaper lithium ion cells won't appear for several years.
Cutting costs further requires achieving those elusive economies of scale, which means building and selling more hybrids.
That's Toyota's strategy; it hopes to sell 160,000 Priuses this year, up from 107,000 in 2006.
Pulling that off will require deft marketing,
especially since the government this fall will start requiring a more accurate
measure of fuel economy. The Prius' claimed 55 mpg will likely drop to a less compelling 46 mpg.
Both Toyota and Ford are planning major advertising campaigns. And discounts on all hybrids are here to stay for a while.
Look closely and you can see the automakers hedging their bets. Toyota is pushing into diesel.
Ditto for Honda, which may not build a new hybrid Accord. Nissan (NSANY) is waiting to see how its hybrid
Altima does before putting the technology into other vehicles.
Honda's planning chief for North America, Dan Bonawitz, likely speaks for most of his counterparts when he says:
"There won't be a giant surge in hybrid sales unless there's an oil crisis."
David Welch is BusinessWeek's Detroit bureau chief. ( And more often then not , a pretty darn good writer .
In fact my opinion only , but BW's IN HOUSE staff is one of the best UNBIASED sources thats not specifically industry oriented . )
--- sung to the tune of " Johnny B Goode " ----- go , go biodiesel go , ............ biodiesel be good !!
Also not mentioned , internal subsidies , tax incentives , etc .
And where exactly are these hybrids built ? How much of toyotas' , Hondas' , and Nissans' on going
and PLANNED increase in imports from Japan are being fueled by this ?
ADMIN NOTE: I edited to remove the long strings of periods -- they're messing up the format on smaller screens, requiring scrolling back and forth to read the rest of the thread.
News & Features March 8, 2007
Why Hybrids Are Such a Hard Sell
by David Welch
Despite their growing popularity, they still haven't crossed over to the mainstream. Many buyers simply aren't willing to pay the premium ....
Given all the buzz ( hype about hybrids? )
you'd think they would be easy to sell.
They're not. After growing nicely through much of 2006, hybrid sales began to slow early this year.
The gasoline-electric vehicles now make up 1.8% of all vehicle sales, says Edmunds.com, down from a peak of 2.1% in October .
( Hmmmm ......... 14.286% sales decline ....... steady trend for 4 months ....... maybe its time ? ..........
SHUT HER DOWN OLLIE - SHE'S PUMPING MUD ! )
One major reason is that hybrids typically cost $3,000-plus more than conventional cars.
As a result, automakers in recent weeks have been slashing prices.
Less than a year ago, Toyota dealers got full price for the Prius.
Now you can immediately lease one for a slim $219 a month. Ford Motor Co. (F)
is also cutting the price of the latest version of its Escape hybrid.
In fact, in February ( 2007 ), carmakers spent an spent an average of $1,500 on incentives per hybrid, says Edmunds—
triple what they laid out in January ( 2007 ).
Making matters worse, just as hybrid sales start slowing, automakers are gearing up to launch a slew of new models. ( UH OH )
At least 30 hybrids will hit the market in the next 20 months.
That will bring the number to more than 40, up from 12 today, says Boston research firm Global Insight.
"Now that the automakers have tapped the early adopters, they're going after the mass market," says Jesse Toprak, an Edmunds analyst.
"For consumers, the answer is often no."
( Call my broker --- hasn't toyota with a dearth of conventional IC , Fuel Cell , AND advanced AT technology bet the farm on this ? )
Tailing Off
A few years ago, automakers decided to put hybrid technology in regular models.
The hope was to move beyond the geek chic of the Prius and win over everyone else.
Hybrid would be another option, like, say, navigation. If enough people bought hybrids, carmakers figured, they would achieve
sufficient economies of scale to eliminate the big premium over conventional models.
That hasn't happened. And some models have suffered badly . Honda Motor Co. (HMC) sold 70% fewer hybrid Accords in 2006;
Toyota has sold 24% fewer Lexus RX 400h sport-utility vehicles so far this year.
The fuel savings are simply too puny to offset the hybrid premium. With gas at $2.50 a gallon, it would take 10 years to recoup
the extra $3,000 cost of the Accord hybrid. ( Both vehicles have also been criticized for how they drive as well ) ...........
Getting prices down—and not by discounting—is the long-term solution. That means finding a way to make the cars more cheaply.
Batteries account for about half the hybrid premium. But cheaper lithium ion cells won't appear for several years.
Cutting costs further requires achieving those elusive economies of scale, which means building and selling more hybrids.
That's Toyota's strategy; it hopes to sell 160,000 Priuses this year, up from 107,000 in 2006.
Pulling that off will require deft marketing,
measure of fuel economy. The Prius' claimed 55 mpg will likely drop to a less compelling 46 mpg.
Both Toyota and Ford are planning major advertising campaigns. And discounts on all hybrids are here to stay for a while.
Look closely and you can see the automakers hedging their bets. Toyota is pushing into diesel.
Ditto for Honda, which may not build a new hybrid Accord. Nissan (NSANY) is waiting to see how its hybrid
Altima does before putting the technology into other vehicles.
Honda's planning chief for North America, Dan Bonawitz, likely speaks for most of his counterparts when he says:
"There won't be a giant surge in hybrid sales unless there's an oil crisis."
David Welch is BusinessWeek's Detroit bureau chief. ( And more often then not , a pretty darn good writer .
In fact my opinion only , but BW's IN HOUSE staff is one of the best UNBIASED sources thats not specifically industry oriented . )
--- sung to the tune of " Johnny B Goode " ----- go , go biodiesel go , ............ biodiesel be good !!
Also not mentioned , internal subsidies , tax incentives , etc .
And where exactly are these hybrids built ? How much of toyotas' , Hondas' , and Nissans' on going
and PLANNED increase in imports from Japan are being fueled by this ?
ADMIN NOTE: I edited to remove the long strings of periods -- they're messing up the format on smaller screens, requiring scrolling back and forth to read the rest of the thread.
Last edited by a moderator:
