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Automakers Set To Steer Customers To Hybrids

Filed by KOSU News in Business.
November 22, 2011

Second in a three-part series

Hybrid cars will take a lot of floor space at the Los Angeles Auto Show beginning this weekend, but they still represent a tiny portion of the U.S. car market.

Fewer than 1 percent of cars on the road have hybrid or electric technology. But for car companies to meet new fuel efficiency rules that will nearly double automakers’ average fuel economy by 2025, that percentage is going to have to grow by a lot.

If you watch TV, you might think the hybrid was king judging by the sheer amount of ads for cars like the Toyota Prius or Ford Fusion hybrid. But that’s far from true: Hybrid sales are under 3 percent of 13 million cars sold in the U.S. Brian Moody with AutoTrader.com says automakers want you to think that their hybrid is the next best thing.

“They want you to think of their company as primarily a green company,” he says. “So the more they can get that message out, then the less ill you might think of them — and you may buy one of their cars even if it isn’t a hybrid.”

Nearly half of consumers say they’ll never consider buying a hybrid, according to a recent survey by Kelley Blue Book. Moody says the main reason is price — hybrids cost thousands more than comparable gasoline-powered models.

But the debate on how to fuel the car goes back as far as the car itself. If you want to learn about the history of cars and their place in American life, you need to meet Bob Casey, senior curator at The Henry Ford. The Dearborn, Mich., museum is huge, with nearly 9 acres of exhibits dedicated to just about any car you can imagine — even a hybrid that looks vaguely like a Model T.

“What [the carmaker] found, however, was that in trying to build a hybrid car — and they didn’t really call it a hybrid car then … they called it a ‘dual power’ — there was no demand for it,” Casey says.

That’s because at the time gas was extremely cheap and there were no CAFE standards or emissions laws.

“These things are expensive so there was no consumer rationale for this car. There was no regulatory rationale for this car. And so, after a year, there was no great demand and the car faded and the company faded,” Casey says.

It took nearly 80 years for hybrid technology to rise from the ashes. Now almost every carmaker has some form of hybrid technology, but the undisputed king is the Toyota Prius, which accounted for nearly half of the hybrids sold in October.

Bob Carter, president of Toyota North America, says that 10 years after the introduction of the Prius, there’s not a viable competitor on the market. He says young buyers are the future of hybrid market.

“I really truly believe the Prius will define the company in the future, and as we get into later in the decade, the Prius will probably upset Camry to become the No. 1 nameplate in the U.S,” Carter says.

How confident is he of that prediction?

“I’m confident enough to [say] publicly that that’s my own personal feeling,” he says.

Carter says hybrids are the best way to get to higher fuel economy standards. He and other auto executives say customers may not be ready for hybrids yet, but now it’s time for the car companies to lead them there. [Copyright 2011 National Public Radio]

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