Despsite success of Prius, some automakers still hybrid shy
MarketWatch notes that some automakers are still reluctant to commit to a hybrid program because the premium cost is unlikely to match the benefits.
A Nissan official acknowledges there is a market for hybrids but wonders if it can be profitable and sustainable. Nissan will offer a hybrid version of the Altima next year, but hasn't offered a price or mileage estimate; also the company has no firm specifics on any alternative-fuel strategy.
Many critics of the auto industry point to the Prius as a shining example of hybrid popularity. But the story stresses that other hybrid models don't share that success record. Analysts point to the uniqueness of the Prius as it was a vehicle totally designed around the hybrid powertrain. Other hybrids are knockoffs of existing models. And that's where the extra cost problems rears its ugly head. The Prius has no incestuous competition against which consumers can compare sticker prices.
Dodge will have a hybrid version of the Durango in 2008. The company is working with GM and BMW on joint hybrid technology, yet officials say there's no need for a "strong presence in the near term."
[Source: MarketWatch]
Reader Comments (Page 1 of 1)
Howard Lee Harkness 10:58AM (9/21/2006)
The really bad is that gasoline prices are headed south -- possibly for up to the next year, and the US consumer is notorious for having a short attention span. This does not bode well for hybrids, at least in the short term.
In order to sell well, a hybrid is going to have to show some definite advantage to the consumer over a standard gasoline ICE. Fuel economy is nice, but you can buy a LOT of gasoline for a $3000+ premium, and it's not clear whether the extra cost of a hybrid will translate into higher resale value.
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Bill Guiffre 7:09PM (9/21/2006)
I purchased a Prius this year and there are three factors that weighed in my decision: 1) The tax incentive's (Fed and State) offset the "premium" for the hybrid system, 2) my ability to walk the talk regarding greehouse gas emmissions, and 3) the unique design of the Prius -- I want people to know I am doing my part for #2 and that I am driving a high tech vehicle. (It is so strange to drive a vehicle where you have to start the motor first -- what a waste.)
Because my budget was tight, the added mgp over my previous Jetta was calculated into my monthly budget but really wasn't a major factor. In fact, I figured gas prices for 2007 at $2.25/gallon. They were close to $2.70/gallon when I purchased the Prius but I suspected they would go down.
Ford would sell more Escapes if the Escape Hybrid had at least a different front and rear design so it would be unique for the gas only version.
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AZ Mike 9:38AM (9/22/2006)
the skeptical automakers are smart. the hybrid is truly a fad.
why do I believe this? three things:
1) remove all the federal and state incentives, and see what happens. these can amount to many thousands of dollars, and this is why many are buying them in the first place, not to "save the envoirnment".
2) remove HOV privileges in states that offer them. this has already begun in many states; it also is a major reason for purchase, not to "save the enivornment".
3) hybrids are a very miniscule part of a very large automobile market. when steps 1 and 2 are put in effect, this will show how many folks are really buying hybrids to save the enviornment...and the answer will be "not many".
major automakers are in the business to make money. money isn't made by a niche market of 60,000 vehicles or less, from a vehicle has few shared components with other models.
for those non-believers, take a look at Honda. they certainly didn't get to be where they are by making too many stupid mistakes. yet, they have discontinued two (Insight, Accord) of their three hybrid models. neither were good sellers, and business is about making money, not statements.
it's also a matter of economics for many. there isn't much economic sense in buying a little teeny car for $29,000 (if you're lucky) if it's more than you can afford, or it doesn't fit your vehicle needs.
not all of us live in crowded urban areas!
I live in Arizona. back in 1999, one of our "forward-thinking" legislators passed an alternative fuel law. this gave incentives (up to the full purchase price, plus the cost of the conversion) to anyone who converted their vehicle to propane or CNG. this was a dual fuel system, running on either gasoline or the alternative fuel of choice. most chose propane.
the law turned into a disaster, with over 40,000 people applying for the incentives (sound familiar?). the state changed the law (since the incentives for so many vehicles would have bankrupted the state), and the market for alternative fuel vehicles evaporated. so much for wanting to clean the air, or cutting our dependence on oil, foreign or domestic.
I've lived thru every 'fuel crisis' since the first one in 1973. in every case, after the crisis passes, everone goes back to driving what they like. that isn't opinion, it's fact.
Mike
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