Hybrid vehicles were the toast of the Detroit auto show this month, but many are warning that the segment will see limited growth.
“I don’t think that hybrids will occupy the majority of the market, because the hybrid price is still higher than the customer’s value,” Nissan chief operating officer Toshiyuki Shiga said. “Hybrids are a specialised technology for a certain segment [of consumers who value] the environment.”
Increasing the fuel economy of conventional vehicles would have a much larger environmental impact, Shiga said in an interview on the sidelines of the auto show.
That’s why, in addition to introducing a hybrid Altima later this year, Nissan is expanding its offering of vehicles with a continuously variable transmission (CVT) that reduces fuel consumption by 10% without sacrificing performance.
“If we sell one million units with CVT, it’s the equivalent of 200 000 hybrids in terms of CO2 reductions,” he said.
Hybrid gas-electric vehicles have seen stunning growth in the United States market as gasoline prices doubled and people became more concerned about the environment.
The hybrid-electric vehicle market has grown from two models and fewer than 10 000 vehicles sold in 2000 to 11 models and an estimated 212 000 vehicles sold in 2005.
Sales are forecasted to more than triple to 780 000 vehicles in 2012 as another 51 models are introduced, according to California-based JD Power and Associates Automotive Forecasting Services.
But they would still only make up 4,2% of the vehicles sold.
A big barrier to the sales of hybrid vehicles is the high sticker price. The hybrids on the market currently cost on average $3 500 more than their gasoline equivalents. It would take most consumers years to recoup the initial cost in terms of gas savings.
Automakers should be able to bring the cost of hybrids down once volumes increase, General Motors chairperson Rick Wagoner told reporters after he launched two new hybrid sports utility vehicles.
In the meantime, automakers will continue to take a loss on the vehicles.
“I don’t think anybody makes money on hybrids,” he said. “We introduce new technology all the time that don’t make money but are important to be competitive.”
The segment has also come under fire recently because testing has shown that the cars don’t always live up to their promises in terms of fuel economy.
While acknowledging that “hybrids will be here for quite some time”, Chrysler Group chairperson Tom LaSorda said diesel and other technologies such as ethanol-fuelled vehicles offer good alternatives for reducing emissions and fuel consumption.
DaimlerChrysler introduced what it calls cleaner diesel engines to the US market on Sunday, which offer similar improvements in fuel economy without the hefty hybrid price tag.
The vehicles should do well, according to rating agency Standard and Poors.
“We believe that diesel vehicles could provide a compelling alternative to hybrids,” Standard and Poors said in a recent report. Diesel engines are about 30% more efficient than gasoline engines and offer significantly higher fuel efficiency.
But while diesel is more powerful than gasoline, it also is dirtier, particularly with the smog forming pollutant nitrogen oxide and the acid-rain-causing pollutant sulphur.
European regulators tightened standards on diesel fuel years ago and then used higher taxes on gasoline to entire consumers to buy diesel vehicles. In the US, the cost of the two fuels are just pennies apart and only about 3% of vehicles sold every year are diesel, compared with about 40% in Europe.
Sales have already started to pick up, Volkswagen brand chairperson Wolfgang Bernhard said. The company saw a tripling of interest in diesel vehicles to 20% of vehicles sold among models that offered the option. — AFP