Hiccup for Hybrids

Sales of hybrid electric vehicles may not take off in the US as fast as previously predicted, according to the latest from J.D. Power and Associates. The downward revision is the result of cautious expansion planning by some manufacturers, which is contributing to higher-than-expected vehicle costs.

According to the 2003 Hybrid Electric Vehicle Outlook(SM) (Third Quarter), some automakers have delayed the release of hybrid vehicle models or dropped models from their hybrid program altogether. In addition (and in consequence), the price premium charged to consumers for a hybrid powertrain option is expected to be higher over the next several years than previously expected.

Sales of the three hybrid electric models currently on the market are on course for 40,000 units in 2003. Manufacturers are preparing to introduce a dozen new hybrid electric models over the next two years, more than quadrupling sales for 2005 vs this year. A total of 28 models - 18 truck and 10 car - are expected to offer hybrid powertrain options by 2008, by which time annual purchases are now expected to reach around 350,000 hybrid vehicles (and not 500,000 as previously projected).

'Significant changes in the market over the past several years have caused many of the manufacturers to adopt a wait-and-see approach', said Walter McManus, executive director of global forecasting. 'Hybrid electric vehicles are still a growing portion of the market, but their share is rising at a slower rate than expected... Sales should increase dramatically as more hybrid vehicles, especially in segments other than compact cars, become available, but we still don't expect hybrid-electric vehicles to become mainstream any time soon'.

Next year will see the first full-size pickup hybrids, the Chevrolet Silverado and Dodge Ram, reaching dealers along with the first SUV hybrid, the Ford Escape.

'Trucks should account for about 35 percent of hybrid sales by 2005 and 64 percent of hybrid sales by 2008', McManus said. 'We know, based on J.D. Power and Associates studies, that consumers express interest in a hybrid powertrain option in the same segments as their current vehicles. Trucks generally are more popular than cars, and they will be more popular in the hybrid market as well'.

Honda should see its share of the hybrid market soar to 58% this year based on strong Civic Hybrid sales, but as competition increases its share is expected to fall back to 20% by 2008. Current figures and 2008 projections for other manufacturers are: Toyota - 39% now, dropping to 20% by 2008; General Motors < 2% now, nearly 33% by 2008; DaimlerChrysler just over 1% now, nearly 15% by 2008; and Ford zero now and 6% by 2008.

The 2003 Hybrid Vehicle Outlook Third Quarter is based on J.D. Power and Associates North American Automotive Forecasting data and the firm's consumer research data.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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