HYBRIDS & THE EMOTIONAL FACTOR July 4, 2005 I remember being at the 2002 Los Angeles Auto Show's Motor Press Guild event just after Bob Lutz took the reigns as GM's North American operations chief. After he gave the keynote speech, one of the journalists in the audience asked him what he thought of hybrid vehicles. Lutz summarily dismissed hybrids. GM, he declared, didn't see any future for hybrids. That was then. Subsequently, gas prices started rising at an alarming rate, ultimately piercing the $2 per gallon threshold. In late 2003, Toyota introduced its second-generation Prius gas-electric hybrid car. Sales for the new Prius went through the roof. Suddenly, there was a six-month waiting list for the car. At the 2005 North American International Auto Show in Detroit, Bob Lutz admitted that General Motors make a mistake in underplaying hybrids. "From a strict business proposition, this is not where we would make an investment," said Lutz. "It's not clear that you'll ever be able to recapture the cost of a hybrid in the pricing. But what we forgot in the equation was the emotional aspect of it." What Lutz was talking about is that many car buyers judge a company's commitment to the environment and to new technology by the number of alternative fuel offerings, even if they're not rushing out to buy a hybrid themselves. "The marketing advantage of having a stronger hybrid lineup probably justifies the investment in the technology itself," Lutz said. "Whether the cars economically make sense or not, we cannot not be in that market," he said. Lutz is right in more ways than one. For many consumers, it'll take years to recoup the added cost of purchasing a hybrid. The hybrid versions of the Civic, Accord, Escape, Highlander, and Lexus RX are significantly more expensive than their more conventional counterparts. Depending on how much driving is done, a consumer may need to own the hybrid vehicle for close to seven years before recouping the added initial cost via savings at the gas pump. Hybrid vehicle purchasers are not solely interested in savings at the gas pump, however. They want to play a part in protecting our environment and reducing our dependence on foreign oil. Of course, hybrids also offer buyers a good dose of the high-tech "gee-whiz" factor, which can be undeniably attractive in this era of i-pods and text-messaging. Even LA Car had to re-think its title for its review of the Ford Escape Hybrid. We originally entitled it, "Going Down The Road, Saving Money." Considering the price that many Ford dealers are commanding for the Escape Hybrid, we think you can save more money by buying a conventional Escape. Hence, the re-titled review, The Envorinmentally Conscience SUV. The Escape Hybrid is a bit pricier than the regular Escape, but some of its added tangible and intangible qualities may tip the scale for when the emotional factors are included in the equation. These same factors certainly add to the attraction of other hybrids as well. - RN, LACB, July 4, 2005
It strikes me that this could be more truly said of a Hummer, or large SUV, that you've bought at GM slashed prices. Yes, the prices on these things have been slashed; but you're going to get 20 MPG (if you're lucky). Is it worth the cost? Well, not if you put the emotional aspect in the equation (and you want to drive around in a honking big platform).
the "emotional impact?" car buyers judge a company's commitment to the environment and to new technology by the number of alternative fuel offerings, even if they're not rushing out to buy a hybrid themselves. what a bunch of CRAP!!! he had a chance to recant and he BLEW it. he still wont admit that it is a GREAT idea. you dont have people chomping at the bit for 6-12 months for a car they might not want. that tells me that GM is history
