Fuel Prices The Next Paradigm Shift

The automobile business is a difficult business at the current time due to paradigm shifts that are happening today. The world was shocked by the sky high oil prices in the summer of 2008 announced that a new paradigm shift was happening. The signs had been there before with the prior Oil Crisis of 1973 and 1979. It is projected that gasoline will cost $10 per gallon USD by the year 2015. A new Business Week article outlines our susceptibility to a new oil crisis.

Fuel saving technologies have been put on the front burner to get ahead of the increasing fuel prices. Automobile companies are spending billions of dollars on new technical developments to deal with expensive fuel costs. If they are caught with an inefficient fleet they may be doomed to obsolesce.

The current fuel saving technology that is currently being marketed is the gasoline-hybrid technology. Gasoline-hybrid technology uses electrical motors along with a combination of batteries to carry some of the load along with a fuel efficient gasoline engine. Toyota leads the world in production of gasoline-hybrids with sales of their Synergy Drive System.

The second fuel saving technology will be electric cars, which includes plug-in hybrid vehicles. GM was at the forefront of the electric battery powered car with its Saturn EV1, which is now called the GM EV1. GM did not produce the GM EV1 due to the limited battery technology at the time and the expense of producing the vehicles.


GM spent an amazing $1 billion dollars on the technology and then subsequently shelved the technology. GM had the label of one of the most progressive automobile companies with the GM EV1 in the U.S. If GM would have continued the battery development in coordination with other battery companies they would be the world leader in fuel efficient automobiles.

The third technology in development is hydrogen power either thru use in a fuel cell or using a standard gasoline engine converted to use hydrogen. Prime examples are the Honda Insight and the BMW Hydrogen 7. Honda is betting the bank that hydrogen will be the dominate technology.

GM picked up the development after they watched Toyota win the public relations war with the Toyota Prius and it's Synergy Drive Technology. The ability of Tesla Corporation to produce the Tesla Roadster and Model S was a major embarrassment for GM..... GM has subsequently developed the Chevrolet Volt, a plug in vehicle which will be able to go 40 miles on battery power before using a gasoline engine to recharge the batteries.

Toyota manufactured the first mass-produced hybrid vehicle the Toyota Prius. Their Synergy Drive system has been the leader in gasoline-hybrid technology. Toyota also was the first company to make money on their fuel saving technology Synergy Drive. Toyota started making a profit on the technology after starting development in the 1990's.Toyota introduced the first gasoline hybrid with its the Toyota Japan during 1997.....Toyota began world wide shipments in 2001...selling the Prius in more than 40 countries. The U.S. is the number one market for the Prius with 50% of 1.2 million units sold worldwide. The fuel economy of the 2010 Toyota Prius is 51 city and 48 highway.


SUMMARY:

Large corporations are like huge cargo ships that transverse the globe....the cargo ships hold a large value of goods....but the ships are hard to maneuver and changing direction is slow and time consuming process.

Toyota has decided to capitalize on it's major investment in gasoline-hybrid technology. Toyota has spent in excess of a billion dollars developing the technology....so they are looking for a return on their money.

I am of the opinion that gasoline-hybrids will continue to be popular especially as fuel prices go up. If fuel prices skyrocket again.....people will be looking for the most fuel efficient vehicles available. Those vehicles in the short term will be electric cars!


Toyota has decided to focus on gasoline hybrids and virtually ignore electric cars for a number of reasons. But, Toyota's reasoning may leave them behind other manufacturers. GM is launching its Chevrolet Volt which has an announced fuel economy of 230 mpg. All the other major manufacturers are coming out with electric cars. The future belongs to the bold!

2010 Nissan Leaf

As I have mentioned in some of my previous posts.....a number of companies are developing hybrids, plus-in hybrids, and electric cars. Today's post is on the 2010 Nissan Leaf which is scheduled to delivered to dealers in the fall of 2010. It is an electric car that is scheduled to be sold in the United States, Europe and Japan.

The Leaf uses a front mounted electric motor driving the front wheels....with 80 kws of power and 280 nm of torque. It is powered by a 23 kwh lithium ion battery. Nissan estimates that the crusing range if 100 miles before the batteries will need to be recharged.

The Leaf has no engine to recharge the batteries so after 100 miles the Leaf will need to stop at a recharging station. The somewhat similar Chevrolet Volt will travel 40 miles on battery only before the gasoline motor turns on to recharge the battery....but it has an estimated range of 300 miles before it will need to be refueled.

The Leaf has a top speed of approximately 90mph (145 kmh). A special quick charger option can recharge in battery up to 80% capacity in approximately 30 minutes.

Pricing has not been announced but it is anticipated that the Leaf will sell for approximately $30,000 USD plus options. Nissan will probably receive U.S. government approval for the $7500 income tax credit.

The Leaf has an interesting feature that will allow the owner to remotely turn on the air conditioning or heating.

SUMMARY:

It appears that electric revolution in automobiles has started....the first salvos are being fired.

Can You Believe This Car Gets 230 Miles Per Gallon?

I have done a couple of posts on this ground breaking green vehicle! Unfortunately, it has been one of the least popular posts that I have done with this blog. GM announced today that the mileage estimate for the new 2011 Volt will be an estimated 230 mpg in the city. The mileage for the new Chevrolet Volt is 4.8 times the city mileage for the 2010 Toyota Prius which gets 48 mpg. This is truly a paradigm shift in fuel economy if this turns out to be correct!

The Volt is a true plug in vehicle......it is a totally different vehicle than the Toyota Prius which is a gasoline-hybrid. The Volt actually runs on electricity all the time.....the gasoline motor actually runs to recharge the batteries normally during highway driving conditions. The Toyota Prius does use electricity to run at lower speeds but the gasoline engine turns on to propel the car much of the time. GM also noted that the highway miles per gallon will also be in the triple digits.

The Volt was designed with an objective of running 40 miles on electric power without the engine turning on. According to a survey by the U.S. Department of Transportation, nearly 80 percent of U.S. drivers commute 40 miles or less daily.

GM estimates that the Chevy Volt will save about 500 gallons (1,892 liters) of gasoline based on 40 miles of daily driving and 15,000 miles annually. For drivers that commute 60 miles (96 km) per day or 21,000 miles annually, about 550 gallons (2,081 liters) of gasoline could be saved.

Pricing for the Volt is estimated at $40,000 USD plus options. The Volt would be eligible for a $7500 federal tax credit. It is anticipated that the price would drop for future generations of the Volt as GM when production ramps up.

SUMMARY:

The most technologically advanced car that GM has ever produced! The race will be on to see who comes to market first with the first plug in vehicle. Chrysler, Ford and Mercedes and Toyota are all developing plug-ins and electric cars.

Cash For Clunkers Program To Be Extended

It appears that Senate Democrats have enough votes to win passage of the additional $2 billion dollars for the Cash For Clunkers program. The additional funds should take the program thru September.

The program appears to have motivated auto buyers into new car dealer showrooms. The Obama administration indicated that the program would end on August 7th without additional funding. The program appears to be a major success with increased sales and taken gas guzzlers off the road.

Here are the top ten cars purchased with the Cash for Clunkers program. The Ford Focus is shown above. The top ten cars sold are basically economy cars.

• 1. Ford Focus
• 2. Honda Civic
• 3. Toyota Corolla
• 4. Toyota Prius
• 5. Ford Escape
• 6. Toyota Camry
• 7. Dodge Caliber
• 8. Hyundai Elantra
• 9. Honda Fit
• 10. Chevrolet Cobalt

Listed below are the Cash For Clunkers trade-ins. The list is comprized of mainly SUV's and minivans.

• 1. 1998 Ford Explorer
• 2. 1997 Ford Explorer
• 3. 1996 Ford Explorer
• 4. 1999 Ford Explorer
• 5. Jeep Grand Cherokee
• 6. Jeep Cherokee
• 7. 1995 Ford Explorer
• 8. 1994 Ford Explorer
• 9. 1997 Ford Winstar
• 10. 1999 Dodge Caravan

SUMMARY:

This is definitely a good deal for consumers! Most of the cars listed above are economy cars, so if a consumer buys a vehicle that costs $15000. Then take the $3500 or $4500 a federal rebate....in addition to the discount on the vehicle plus any incentives from the manufacturer.

July Auto Sales

U.S. auto sales appear to be improving substantially in July. Overall auto sales for July were down only 12% percent, with June down 28% and May down 39%. So, it appears that the sales trend is improving substantially.

It appears that the U.S. based automakers and some foreign manufacturers are having a rebound in sales....helped by the Cash For Clunkers program. Meanwhile sales of luxury cars are still in the dumps. ales were the best they have been since the summer of 2008....with a annual run rate of over 10 million cars.

Ford is the sales winner with a 2% increase in sales over last year. GM sales were down 19%, meanwhile Chrysler sales were down only 9.4%. An interesting fact is that GM and Chrysler sales were not impacted by the bankruptcies as much as anticipated.

• Saab down 72%

• Porsche down 51%

• Mitsubishi down 50%

• Jaguar down 45%

• BMW down 32%

• Nissan down 25%
  

• Mercedes down 22%
  

• Mazda down 15%

• General Motors down 19%

• Honda down 17%

• Toyota down 11%

• Chrysler down 9%
  

• Volkswagen down 3%

• Ford up 2%

• Kia up 5%

• Hyundai up 12%
  

• Volvo up 26%

• Subaru up 34%

Ford seems to be the beneficiary of increased sales lately. It appears that the GM and Chrysler bankruptcies have sent a number of customers over to Ford. The following Ford models had material increases in sales Focus up 44%, Escape up 94%, and the Fusion was up 66%.

Other notable increases were posted by the Toyota Prius up 30%, Toyota RAV4 up 33%, Hyundai Elantra up 30% and the Volkswagon Jetta up 31%.

July sales were up at a fairly decent run rate of 11 million cars annually. So, it appears that consumers had more faith in the future to spend money on high ticket items.

SUMMARY:

This month the Cash For Clunkers program had a substantial impact on auto showroom traffic and sales. Unfortunately, the government implemented a half way program. Increasing sales for the automobile manufacturers would do more than all the government loans available.

An interesting anomaly is that sales of U.S. built cars both by domestic and foreign manufacturers appears to be increasing. Meanwhile imported luxury cars continue with the steep declines over last year.

2011 Chevrolet Volt

Chevrolet Volt is a game changer from General Motors (GM), in fact this could be one of the vehicles to save the venerable brand. The Volt is a plug in hybrid to be produced by GM, unlike current available hybrids like the Toyota Prius, the propulsion of the Volt is accomplished by the electric motors, it has a regular gas engine which recharges the batteries, but the gas engine does not power the wheels.

It's lithium-ion batteries have a range up to 40 miles (64 km), which exceeds the daily commute of 75% of Americans, which is an average of 33 miles (53 km). A small 4 cylinder gasoline engine drives a generator to provide a longer range. This effectively extends the Volt's potential range to as much as 640 miles (1,030 km) on a single tank of fuel, but the range could be extended indefinitely by refueling the vehicle. The Volt's lithium-ion battery pack can also be fully charged by plugging the car into a 120-240VAC residential electrical outlet.

Since the current Society of Automotive Engineers (SAE) definition of a hybrid vehicle states the vehicle shall have "two or more energy storage systems both of which must provide propulsion power, either together or independently", the company has avoided the use of the term "hybrid" when describing its non-conforming Voltec designs. Instead GM has described the Volt as an electric vehicle equipped with a "range extending" gasoline powered internal combustion engine. However, the combination of an internal combustion engine and electric motors in such a configuration is most often referred to as a series hybrid.

An optional feature will be a a thermovoltaic solar power roof, allowing the owner to charge the battery by leaving the vehicle in sunlight. GM has decided on a new descriptive terminology to distinguish it from traditional hybrids. They are calling the Volt an E-REV, for extended-range electric vehicle, although it still qualifies as a hybrid.

The estimated production plans are 10,000 first year with a ramp up to 60,000 units in the second year. Production in the U.S will be done at GM's Detroit/Hamtramck Assembly. GM is considering building all of the Volts for the European market, branded Chevrolet, Opel and Vauxhall, at their Vauxhall plant in Ellesmere Port in the United Kingdom. GM indicated that the Volt would be available for sale in Europe in 2011, then available in Australia by 2012.

General Motors was reportedly in disagreement with the United States Environmental Protection Agency regarding how the Volt should be tested to determine its official fuel economy rating. The EPA reportedly wants to alter the method of testing currently used for all other hybrid vehicles. If tested with the same EPA tests used by other hybrids, the Volt's ability to use the energy stored in the batteries would result in it achieving a fuel economy rating of over 100 mpg, which would make the Volt the first mass-produced automobile to achieve such a rating. Currently, the 2010 Toyota Prius has a combined city/highway rating of 50 mpg.

Pricing for the Volt in the U.S. is estimated at $40K plus, with a government tax incentive rebate of $7500 bringing the price to around $32.5K. Pricing in the U.K. market would be estimated at GBP£20K, less a government tax incentive rebate.

SUMMARY:

My take on this vehicle is that the Chevrolet Volt will be a game changer in a number of different ways. First, it will help to get GM sales and image back on track after the government sponsored bankruptcy, second it is a mass market vehicle that can change the hybrid landscape, which Toyota dominates presently. Third it will be a major milestone on the way to American energy independence!

Shown below is the original Volt concept vehicle!

Information via Wikipedia!

Lexus HS 250H

Toyota Motor Corporation has made a decision to increase their hybrid technology across many of their models. They view hybrids as the best method to increase fuel economy! Today's car is a new model designed specifically to be a hybrid....the 2010 Lexus HS250h (HS).

The HS is powered by a 2.4 liter Atkinson cycle four cylinder, which is rated at 147 hp. There are two electric motors that add an additional 40 hp. The continuously variable transmission varies the ratios depending on speed, rpm and load. The HS is also equipped with regenerative braking system.....which helps to recharge the batteries when braking.

The HS will run on electric only mode just like the Toyota Prius for short distances at low speeds.....but at 20 mph. the gasoline motor turns on to assist driving.

If your interested in technology, the HS comes equipped with LED lighting, front and rear parking cameras, a heads-up instrument display, Mark Levinson entertainment package.

Pricing for the HS has not been announced....but should be approximately $40,000 USD plus options. Fuel economy is 34/35 mpg city/highway.

The debate continues as to whether hybrids are a long term solution or a temporary solution to the energy crisis. My thought is that they are expensive versus the cost of the gasoline saved...also those calculations are dependant on the price of gas.

If a hybrid takes ten years to cover the additional cost of the vehicle versus a standard gasoline engine....someone would have to keep the vehicle for that time period to break even or be an environmentalist.

The size of the HS250h is very similar in size to the Lexus IS250.... so why did Lexus develop a totally new car. Perhaps it was a packaging issue....they must not have been able to get all of the hybrid drive train in the IS250.

SUMMARY:

As I have outlined in a number of my other posts....driving most hybrids you will have to sacrifice driving dynamics. The HS is nowhere near as much fun as the leaders in this class.... the Cadillac CTS and the BMW 328i.

Auto Pacific Announces Vehicle Satisfaction Awards

AutoPacific announced its 13th Annual Vehicle Satisfaction Awards (VSA). The top ranked auto manufacturer for the second year in a row is Cadillac. Cadillac was ranked highest among 25,000 new car owners for 2009. This proves that General Motors is building good cars...with satisfied owners. Much of the public is till under the assumption that American cars are not made as well as the Japanese vehicles. It is simply not true anymore!

This has been a turbulent year for GM with sales down substantialy, and the auto industry in such turmoil. This year has been one of the most dismal sales years for the automobile business in recent history.

The VSA award is coveted among auto manufacturers since earning this award will result in sales in the showroom. Also, friends will ask their friends and co-workers typically ask if they like their new car....the real test is if they would buy this car again.
The manufacturer that has increased their satisfaction with their vehicles the most for 2009 is Hyundai! They have come a long way since 1986 when they started selling cars here in the U.S. They moved up eleven spots in the Overall brand satisfaction ratings earning 2009 Rising Star Award. Outlined below are the passenger cars...if anyone is interested in the light truck category go to Auto Pacific.

• Premium Luxury Car - Lexus LS


• Aspirational Luxury Car - Hyundai Genesis


• Luxury Large Car - Lincoln Town Car


• Luxury Mid Size Car - Lexus ES


• Premium Mid Size Car - Hyundai Sonata


• Mid Size Car - Ford Fusion


• Image Compact Car - Toyota Prius


• Compact Car - Mitsubishi Lancer


• Economy Car - Honda Fit


• Sports Car - Porsche 911

Summary:

The VSA is a factor that everyone buying a new car should consider. If a car earns the top honor in the Auto Pacific VSA, then it should be put on your shopping list and worth a test drive. There are still a number of other factors to consider such as the styling, drive ability, price, deal, rebates etc.

Honda Insight

This car was the top selling model in Japan for April of 2009....considering that Honda started selling the Insight in Japan in February that is quite extraordinary. This if the first time that a gasoline electric hybrid or any type of hybrid has taken the top selling honor in Japan. The Insight went on sale in the US in April.

The EPA fuel-economy ratings are 40 mpg city and 43 highway—versus the Prius which gets 48 city and 45 highway, respectively. The Honda Insight operates differently than the Toyota Prius, this explains the fuel economy differences. When you turn on the key in the Insight the motor turns on, most of the time when the vehicle is operating the motor will be running. When you turn on the Prius the electric motor will operate and propel the vehicle on electric power below 35 mph. The Toyota Prius is a complex system, which costs more to build but results in higher fuel economy.

The Insight is equipped with a 88 hp, 1.3 liter four cylinder engine along with a 13-hp electric motor. Honda has Integrated Motor Assist (IMA)....IMA is an engineering feature where the electric motor is placed between the engine and the transmission. The electric motor assists the motor as needed.

A CVT transmission is the only transmission offered. The Insight has an interesting ECON button, that cuts down air-conditioning cycles and moderates acceleration to improve the fuel economy.

Honda estimates that it should sell approximately 90,000 Insights per year in the U.S.

Pricing for the Insight starts at $19,800 USD, and £15,490 in the UK plus options. Pricing for a Prius starts at $22,000 USD plus options.

SUMMARY:

My take on the Insight is that Honda manufactured the Insight to compete on price. It is the cheapest hybrid available.....but as with most hybrids you sacrifice performance and handling. The most fun to drive hybrid that I have driven is the Ford Fusion Hybrid.

Hummer Hybrid Gets 100 MPG

General Motors is in in discussions with three companies to sell the Hummer brand. I suspect that Raser Technologies is one of those companies. Raser Technologies has developed a Hummer H3 Hybrid. Raser Technologies of a Provo, Utah-based builder of geothermal power plants, which tap underground steam to turn generators and produce electricity with less pollution than those fueled by coal or oil.

Raser plans to use an electric technology similar to that in the Chevrolet Volt, which should give the Hummer Hybrid a gas saving 100 MPG.

Raser says, their E-REV (Extended-Range Electric Vehicle) powertrain technology, will give the Hummer Hybrid approximately 100 miles (161 kilometers) per gallon when driven as much as 40 miles a day and can travel 40 miles on electrical power alone.

Raser chose the Hummer for the demonstration because “it’s the worst,” Higginson said in an interview. The company wanted to “show the world that technology can take the worst offender and make it greener than a” Toyota Prius, he said.


A 2008 Hummer H3 gets 14 mpg in the city and 18 mpg on the highway, while a Prius gets 48 mpg in the city and 45 on the highway, according to the E.P.A.

My take is that I am somewhat skeptical that 100 MPG can be achieved with such a heavy vehicle. If they can...they deserve the recognition and sales that this achievement will generate.

This also demonstrates that smaller companies are on the forefront of this technological shift in the automobile powertrains. Then, why cannot the big three generate this kind of technology with all their money and resources?

2011 Chevrolet Volt

Chevrolet Volt is a game changer from General Motors (GM), in fact this could be one of the vehicles to save the venerable brand. The Volt is a plug in hybrid to be produced by GM, unlike current available hybrids like the Toyota Prius, the propulsion of the Volt is accomplished by the electric motors, it has a regular gas engine which recharges the batteries, but the gas engine does not power the wheels.
It's lithium-ion batteries have a range up to 40 miles (64 km), which exceeds the daily commute of 75% of Americans, which is an average of 33 miles (53 km). A small 4 cylinder gasoline engine drives a generator to provide a longer range. This effectively extends the Volt's potential range to as much as 640 miles (1,030 km) on a single tank of fuel, but the range could be extended indefinitely by refueling the vehicle. The Volt's lithium-ion battery pack can also be fully charged by plugging the car into a 120-240VAC residential electrical outlet.

Since the current Society of Automotive Engineers (SAE) definition of a hybrid vehicle states the vehicle shall have "two or more energy storage systems both of which must provide propulsion power, either together or independently", the company has avoided the use of the term "hybrid" when describing its non-conforming Voltec designs. Instead GM has described the Volt as an electric vehicle equipped with a "range extending" gasoline powered internal combustion engine. However, the combination of an internal combustion engine and electric motors in such a configuration is most often referred to as a series hybrid.

An optional feature will be a a thermovoltaic solar power roof, allowing the owner to charge the battery by leaving the vehicle in sunlight. GM has decided on a new descriptive terminology to distinguish it from traditional hybrids. They are calling the Volt an E-REV, for extended-range electric vehicle, although it still qualifies as a hybrid.

The estimated production plans are 10,000 first year with a ramp up to 60,000 units in the second year. Production in the U.S will be done at GM's Detroit/Hamtramck Assembly. GM is considering building all of the Volts for the European market, branded Chevrolet, Opel and Vauxhall, at their Vauxhall plant in Ellesmere Port in the United Kingdom. GM indicated that the Volt would be available for sale in Europe in 2011, then available in Australia by 2012.

General Motors was reportedly in disagreement with the United States Environmental Protection Agency regarding how the Volt should be tested to determine its official fuel economy rating. The EPA reportedly wants to alter the method of testing currently used for all other hybrid vehicles. If tested with the same EPA tests used by other hybrids, the Volt's ability to use the energy stored in the batteries would result in it achieving a fuel economy rating of over 100 mpg, which would make the Volt the first mass-produced automobile to achieve such a rating. Currently, the 2010 Toyota Prius has a combined city/highway rating of 50 mpg.

Pricing for the Volt in the U.S. is estimated at $40K plus, with a government tax incentive rebate of $7500 bringing the price to around $32.5K. Pricing in the U.K. market would be estimated at GBP£20K, less a government tax incentive rabate.

My take on this vehicle is that the Chevrolet Volt will be a game changer in a number of different ways. First, it will help to get GM sales and image back on track after the anticipated government sponsored bankruptcy, second it is a mass market vehicle that can change the hybrid landscape, which Toyota dominates presently. Third it will be a major milestone on the way to energy independence!

Shown below is the original Volt concept vehicle!

Information via Wikipedia!

2010 Toyota Prius

Today's post is about a vehicle the 2010 Toyota Prius, that started a paradigm shift in the auto world. The Toyota Prius has turned the automobile world inside out with their high mileage hybrid introduced in 2001. The other auto manufacturers have been playing catch up ever since. See the Edmunds.com video!

The word prius is a Latin word meaning to precede....a Toyota spokesperson stated that "Toyota chose this name because the Prius vehicle is the predecessor of cars to come. In business speak, Toyota is betting big that this will be next the successful technology in automobile fuel economy. I would have to agree that Toyota has proven the technology to be feasible and profitable.

Toyota was actually able to overcome the battery restrictions that had held the the GM EV1 from permanent production. Although, the EV1 was an electric car not a hybrid.

In 1994, Toyota executive Takeshi Uchiyamada was given the task of creating a new car which would be both fuel efficient and environmentally friendly. After reviewing over 100 hybrid designs, the engineering team settled on a hybrid engine design based on a 1974 TRW (an American auto parts supplier)patent, but many technical and engineering problems had to be solved within the three years that the team was given to bring the car to the Japanese market, a goal they barely achieved as the first Prius went on sale in December 1997. A main problem was the longevity of the battery, which needed to last between 7 and 10 years. The solution the engineers came up with was to keep the battery pack between 60% and 40% charged, proving to be the "sweet spot" for extending the battery life to roughly that of the other car components.

The car was a modest success in Japan then Toyota put it on sale in the U.S. and European markets in 2001. Sales were limited and customer waiting lists of up to 6 months were common during the first few years. In 2004, a complete redesign, increased production, and soaring fuel prices led to significant increases in sales, sales hit a high point with over 182,000 sales in the U.S.

The Prius has been restyled for 2010, the interior has been upgraded and the fuel economy increased slightly to 51 city and 48 highway. The performance from 0-60 mph. is 9.8 seconds. The base price is estimated to be $23,500 plus. See a Car and Driver article on the 2010 Toyota Prius.

My take is that the 2010 Toyota Prius is a continuing evolution of the hybrid gasoline electric car. Toyota will be rewarded for it's smart business acumen. It is a great green economy car, but not my cup of tea!

Hybrid Car Sales Tank

As I have mentioned before car sales have taken a nose dive off the deep end lately. Americans have cut back on buying vehicles of all types as the economy continues to slow down. I read an interesting article in the LA times by Ken Bensinger which is the basis for this post. Unfortunately for the automakers, due to the low price of gasoline hybrid auto sales have taken a steeper decline than regular automobiles.

Last summer when gas prices were at there peak $4, hybrid sales were hot! Now consumers refuse to pay a premium for a fuel efficient vehicle now that the average price of gas has dropped to $2. The bottom line is that it hybrids are not cost effective presently with the low price of gas. A hybrid can cost up to $9000 more than the same non hybrid vehicle, $9000 will pay for a lot of gasoline. The premium over a non hybrid vehicle can take up to ten years or more to pay for the difference in the additional fuel economy that a hybrid generates.

The average days to sell a Toyota Prius hybrid has gone from 1.6 days in July 2008 to 76.6 days in March 2009. The Camry hybrid has gone from 4.6 days to 156.2 days during the same period.

President Obama is calling on the automakers to build the cars of tomorrow, but the present business case is costing the auto companies money. Currently the auto companies complain that they loose money on every hybrid that they produce. Congress is pushing the auto manufacturers to improve mileage as a key to reducing U.S. dependence on foreign oil and limiting the global warming gases that autos emit.
Manufacturers from across the world are increasing their hybrid models. Here are the latest updates. Honda plans to introduce the new Insight hybrid in the next few weeks after discontinuing the Honda Civic hybrid in 2008. Hyundai and Audi plan to deliver their first hybrids sometime in 2010. Toyota has the new Prius coming in the next few months along with a new Lexus hybrid.

Since the big three U.S. automakers have testified before congress, the biggest push will be coming from the American manufacturers. Ford plans to follow its high mileage Fusion and Mercury Milan hybrids (see Feb. 6th post Can Detroit Build Hybrids?) with a battery powered van in 2010 and a family of hybrids in 2012. Chrysler has committed to eight new hybrids or electric cars by 2015. Meanwhile, GM indicates that 26 of the 33 cars they sell in 2015 will be some type of hybrids, including the Chevrolet Volt, a plug in hybrid due out next year. I have a future post coming on the Chevrolet Volt, which is a game changer for GM and the auto industry.

Consumer Reports on Top Picks for 2009

Consumer Reports magazine has just issued their Top Picks for 2009, which are outlined below.

• Pickup Truck - Chevrolet Avalanche
• Fun To Drive - Mazda MX-5 Miata
• Small SUV - Toyota Rav4
• Small Sedan - Hyundai Elantra SE
• Green Car - Toyota Prius
• Minivan - Toyota Sienna
• Best Overall Vehicle - Lexus LS 460
• Upscale Sedan - Infinity G37
• Midsized SUV - Toyota Highlander
• Family Sedan - Honda Accord

They choose these cars based on:

(1) Road Tests - the vehicles must rank at or near the top of their categories which includes more than 50 individual tests and evaluations.

(2) Reliability - each car must have an average or better reliability rating based upon more then 1.4 million vehicles reported by Consumer Reports subscribers.

(3) Safety - top picks must perform adequately in overall safety tests conducted by the government or insurance industry. In addition, each must offer electronic stability control (ESC), which is a proven lifesaving feature.

My view on Consumer Reports is that overall they do a good job of evaluating cars based upon their criteria. Anyone buying a car has to consider a number of additional items styling, driveability, fun factor, brand, warranty, resale value, discounts and affordability. The bottom line is that this is guide to use! In the end result you have to be happy with the car that you have purchased!