Escalating US gasoline prices have prompted ample headlines regarding US motorists' increasing demand for gas-electric hybrid vehicles. A trend is emerging, but it's too early to tell if a groundswell of consumers actually might swap their gas guzzlers for fuel-efficient hybrids.
Currently, the US market offers only hybrid cars, but vehicle manufacturers have unveiled production timetables for hybrid sport utility vehicles to sate SUV lovers.
ABI Research of Oyster Bay, NY, projects that hybrid models from Toyota Motor Corp. Ltd. and Honda Motor Co. could account for 10% of the midsize passenger car sales in the US by 2006. Total 2003 US midsize passenger car sales accounted for more than 2 million vehicles.
Hybrid production forecast
Some 300,000-350,000 hybrid vehicles will be built worldwide in 2006, ABI concluded in its study entitled "Hybrid Electric Vehicles: Global Market Assessment, Key Technologies, and Forecasts."
"The price of fuel is definitely going up, particularly in the US right now. Obviously, there is going to be more demand for more fuel-efficient vehicles," ABI analyst Dan Benjamin told OGJ.
"Honda and Toyota are the market leaders," he said. "Other automakers will try to keep pace with their own hybrids, but those without proper development will either be forced to license hybrid technology or try to market diesels as a competing technology."
Special-collections librarian Barbara Kile of Houston bought a two-person Honda Insight 2 years ago out of environmental concerns, but she says she appreciates its economic benefits, given current gasoline prices. The US Environmental Protection Agency rates the 2004 Insight city/highway fuel economy at 60/66 mpg (manual transmission).
Kile's biggest problem was literally finding hybrid models to test drive because dealers already had them on backlog. "They were already sold as they came off the delivery truck," she said.
Toyota has increased its US production of the Prius hybrid because customer demand proved higher than initial sales estimates of 36,000 vehicles for 2004, said John Hanson, Toyota product communications manager in Torrance, Calif.
"Right now, we are looking at 12,000-19,000 orders on backlog. We decided to bump our production, so we are looking now at an annual rate of 47,000/year. If needed, we may bump that again," Hanson said.
Prius hybrids are selling at a rate of 3,200-3,500/month in the US compared with 1,900/month last year. "It is quite an uptick," he said.
Gas-electric SUVs
Toyota plans to launch a hybrid Lexus luxury SUV, the RX400h, in December. A hybrid Highlander—the automaker's midsize SUV—is planned for spring 2005. Depending upon demand, hybrids could be offered in categories from subcompacts to heavy-duty pickup trucks within a decade, Toyota executives have said.
Ford Motor Co. has scheduled a hybrid Escape compact SUV for sale late this summer. Although Ford pays royalties on Toyota-hybrid patents, Ford executives emphasize that Ford continues to develop its own hybrid research and technology.
Andy Boyd, American Honda public relations manager in Torrance, said the hybrid Civic had its best sales month in the US last month since it was introduced in March 2002. Sales in March 2004 were 2,725, up 7.6% from March 2003. For the year as of Apr. 5, Honda sold 5,800 Civic hybrids. This fall, Honda plans to release an Accord hybrid.
"We have seen a spike in demand when fuel prices rise and especially when there is a lot of media coverage to that effect," Boyd said. "I think that it would take a more sustained rise in fuel prices, and then in customer perceptions, to effect any kind of lasting change in the demand for the vehicle."
Judging by the vehicles driven by OGJ editors and writers, hybrid vehicles still remain a niche market. This writer drives a 1994 Ford Ranger, but her next vehicle might be a hybrid, depending upon price and whether available models can support a canoe-kayak rack.