Hybrids going mainstream, have to sell on cost and mileage, not image
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In the first few years after Honda and Toyota introduced the Insight and Prius to the market, the price premium and limited utility of the vehicles meant they appealed mostly the most environmentally conscious drivers. As more manufacturers introduce hybrid vehicles of all shapes and sizes, the technology is rapidly becoming mainstream. That means the hybrid vehicles have to appeal to buyers on the same merits as any other vehicle. They'll have to compete on price, mileage and other features, especially as tax credits expire on many of the models (they already have on the Prius).
So far in 2007, the Prius, Camry hybrid and Ford Escape/Mercury Mariner hybrids have all had sales increases. On the other end of the scale high-end hybrids from the Lexus and the now-discontinued Honda Accord hybrid haven't fared so well. These more expensive models haven't held the same appeal, perhaps because buyers of such vehicles aren't as concerned about mileage and the lack of visual differentiation doesn't set them apart the way a Prius does. It remains to be seen how the new LS600h hybrid holds up after strong initial sales. The new hybrid SUVs from GM are visually different from their conventional counterparts and the dramatic increase in fuel economy should attract some of the larger families that have a need for such a vehicle.
[Source: Automotive News - Sub. req'd]
Reader Comments (Page 1 of 1)
Kardax 5:36PM (12/03/2007)
The Prius remains popular for two reasons:
1) It's not just wearing a hybrid badge. It actually gets very good MPG.
2) It doesn't sacrifice practicality--it's a good car that can hold its own in a feature comparison to other sedans.
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Murc 2:51AM (12/04/2007)
I agree with the headline 100%.
I buy a car based off of its looks & features.....not on how many emissions I put into the atmosphere.
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PMontero 7:30AM (12/04/2007)
"Jesse Toprak, an analyst with the consumer Web site Edmunds.com, says buyers' priorities have shifted. 'All those early adopters who bought hybrids were either making a statement or it was fashionable, and they really weren't concerned that much with saving money on gas,' Toprak says."
"'We're past the era of hybrid tokenism, meaning you throw a hybrid badge on any vehicle and it's going to capture hybrid buzz,'"(Bradley Berman of hybridcars.com)
I won't say that both of these quotes are bordering on ignorant, but, after studying the market, I see some basic flaws in both... It may be true that there was a hybrid buzz early-on and that some early hybrids were relatively poor performers in terms of fuel economy but this doesn't make the purchase of these vehicles merely fashion statements. I have access to large sample studies in which customers' preferences, purchase reasons & satisfaction rates show that these buyers are LESS likely to be driven by image than mainstream customers (though image is still, as with any buyer, important); Fuel economy, though not as important as you might think it would be (like, #1 in Purchase Reasons), is still a significant driver; Environmental concerns/ reasons are, by far, the biggest differentiator for these customers vs. mainstream buyers. In fact, I would suggest that Fuel Economy rises to a level of importance buried within these larger Environmental concerns (These buyers don't "amortize" their purchases with the fuel savings that they get with a hybrid; a) they're not cross-shopping less expensive compact cars as much as you might think, and, b) as noted, they're more interested in environmental effects than fiscal).
I would suggest that early adopters, rather than be driven by fashion & image, are actually those who are driven by actual benefit (to environment, in this case). As volumes rise, as with any segment, the alpha buyers influence less committed buyers (and, yes, more image-oriented buyers) to the fold. That is why a Mustang sells in such high volumes (though it should be noted that Prius is outselling 'Stang this year); Though there are a lot of "true believers" out there, the volumes are built upon the mainstream buyers. Hybrids are entering this phase now (though it could be argued that subsidies and HOV lane benefits pushed this move in California earlier). So, in fact, I expect that attitudes, though probably still likely to be more skewed towards Environmental concerns, will become more "mainstream"... but, the early buyers were anything but.
Regarding the Accord Hybrid, I would suggest that it was meant to complement Civic Hybrid and mainstream Accord trim levels by offering V6 performance with I4 fuel economy & Hybrid emissions levels but that the story was either poorly-told, poorly-packaged (no moonroof, for example, in the most expensive Accord at launch) or one that didn't work for those early hybrid buyers who sought less-compromised Hybrid benefits. In fact, Honda & Toyota would love for the "unwashed (albeit well-heeled) masses" to embrace Hybrids because it might actually make it easier to sell a Hybrid badge on something like an Accord or RX400h, where the cost can be hidden in a higher MSRP. The failure of Accord could be a sign that the image value is less than the quotes above (though I respect both experts immensely) would suggest, at least, to this point.
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