Speaking of Blue-Oval Hybrids and Fuel Prices
I just got a news release from Ford saying that April should be the company's best-ever for hybrid sales. The release notes the use of 0% financing -- nationwide -- for Escape/Mariner hybrids (in March they offered it only in California and Washington D.C.). It also mentions the Kermit ads and Ford Escape Hybrid appearances in Extreme Makeover: Home Edition as possible reasons for the sales bump. For those interested, we're talking around 200 Mariner Hybrid sales and 1,800 Escape Hybrid sales (for reference purposes, Ford sold approxmiately 200,000 F-Series in the month of March).
I seriously think we could see $4-a-gallon gas this summer, which is still:
A...
A relatively low price in terms of average U.S. household income and
B. Cheaper than gas on most of the planet.
However, it will be interesting to see if hybrid sales shoot up -- again. I know that having "hybrid" on the outside of a vehicle doesn't guarantee sales, and certain models (Highlander, Accord) aren't moving off lots with much verve. Have hybrids had their 15 minutes, or will $4-a-gallon gas put hybrids back on everyone's "gotta have" list in the next eight weeks? I guess we'll know soon enough.
- Posted by
- Karl Brauer April 21, 2006, 12:43 PM
- Permalink
- Categories:
- Ford, Hybrid Vehicles, Mercury
Please also note an average American drives a lot more compared to the rest of the world.
Most people buy hybrids to make a statement, not to save money on grass. For whatever reason people dont feel the Escape or Accord hybrids announce to the world they are driving a hybrid and thus buyers are leaving them on the lots. Hybrids arent going anywhere but the automakers are no realizing having a hybrid powertrain is no guarantee of sale success. They are going to have to spend money on advertising, lower prices and possinly use incentives like Ford. A few months ago all of the expert automotive press was saying GM and Ford were struggling because they were leaning on SUVs and slow to market with hybrids. That whole argument was stupid because hybrids are only a small part of Toyota and Honda's recent successes in this market but media types suggested that hybrids were single handedly leading those companies to record sales. Now in spring of 2006 GM new SUVs are doing well and hybrid sales are slowing down in spite of $3 a gallon gas. So much for the experts.
The average American will drive less as gas prices goes up. City planning will reorganize to conform with the rest of the world so people don't have to drive so far to get what they need.
Hybrids will sell if their performance justifies the price. In the case of the Honda Accord Hybrid, it gets virtually the same mpg as the I4 version of the Accord. What's the point of that? Is the driver of the Accord Hybrid suppose to be a street racer, who has an interest in getting I4 mileage, while paying $31,000 up front for the car? That's why the Accord Hybrid makes no sense.
I don't know what Ford have in mind, but selling Mariner Hybrids doesn't actually seem to be their intention. No wonder they've only sold 200 of them in the month versus the Escape's 1,800: they aren't available at dealers! If you want to test drive one, then you have to go and drive the Escape instead. Unless you are intent on buying the Mercury badge, there's the sale right down the pan immediately.
Well, if the USA trend towards ever larger vehicles and engines continues in spite of high gas prices, then we know the USA consumer has the money to support them.
Even hybrids are following this road, though - so far - there seems to be some resistance to hybrids promoting performance rather than economy.
Incidently, when was the last time you heard an auto journalist raving about a car that got great gas mileage instead of getting more Horsepower?
At this point, it feels like Americans don't care so much about high mileage, but they care a lot about horsepower. Horsepower sells to the average American in a TV commercial: look at the Dodge Hemi. I think there might be a growing awareness to global warming/dependence on foreign oil, but it's gonna take some time and some people just don't care.
There have been a few high profile studies showing that some hybrids can save money. I think the latest Consumer Reports issue said the Prius and Civic would save you money over a 5 year ownership period (when compared to models with the traditional powertrains). However, there's been so much press stating that there's no way hybrids can save you money, that that has just become the common view.
Most auto journalists are driving enthusiasts writing for driving enthusiasts, so it's not surprising that they rave about horsepower over fuel economy... for the most part, it's what their target audience wants to hear about. If you look at sites geared more towards environmental trends in the auto industry (greencarcongress.com, autobloggreen.com), you'll hear a lot more about the latest fuel economy tech than the latest horsepower tech.
I believe that once hybrid technology becomes much cheaper and easier to make back the investment, people will go to it more. I don't believe that $3/gal or even $4/gal gas will change what vehicles people want, too. That's why I think GM's strategy is very smart. They are making hybrids much cheaper with the BAS hybrid, which saves 80% of the gas of normal hybrids yet costs only half of what those other systems do. They have a new 2 mode system which they are debuting on their big SUVs, which will save much more money for the average consumer (since SUV's consume more gas), which will make it a more attractive feature to people. Combine this with Active Fuel Management, and GM is safeguarding its most profitable vehicles from gas prices and giving new life to its car lineup, which will get mainly the BAS hybrid.
They are going to focus mainly on saving fuel, instead of this new performance stuff that isn't going anywhere. Most people who want performance will look elsewhere, such as bigger or revvier engines, rather than a hybrid. People think Hybrid=Saving Gas.