Hybrid Shoppers Drop as Fuel Efficiency Becomes More Realistic

By: Anthony Fontanelle

As car shoppers become more realistic about the fuel efficiency capabilities of hybrid vehicles, the percentage of hybrid purchasers has declined, according to the J.D. Power and Associates 2007 Alternative Powertrain Study which was just released yesterday.

J.D. Power's study, now in its second year, examines the reasons why consumers consider or avoid alternative powertrain vehicles. The Alternative Powertrain Study includes the Automotive Environmental Index, which combines the U.S. Environmental Protection Agency (EPA) publicly available data related to fuel economy, air pollution and greenhouse gases for 2007 model-year vehicles. It also includes J.D. Power's voice of the customer data, which is used to help determine the relative importance of these environmental factors in relation to stated fuel economy.

J.D. Power's study finds that 50 percent of new-vehicle shoppers are considering a hybrid, down from 57 percent in the 2006 study. While a general decline can be observed across all age groups, in particular younger vehicle shoppers, those 16 to 25 years old, appear less interested in the powertrain technology, with 60 percent considering a hybrid in 2007, down from 73 percent in the previous year. The average additional price hybrid shoppers are willing to pay for this powertrain is $2,396, with the anticipation of getting an enhancement of 18.5 mpg over a traditional vehicle of same size.

"In the 2006 study, we found consumers often overestimated the fuel efficiency of hybrid-electric vehicles, and the decrease in consideration of hybrids in 2007 may be a result of their more realistic understanding of the actual fuel economy capabilities," said Mike Marshall, the director of automotive emerging technologies at J.D. Power and Associates. "While hybrid sales are steadily increasing, they continue to face competition for market share against an increasing offering of other alternative powertrains and fuels options."

"As the automotive industry steadily offers more alternative powertrain/fuel options to consumers, buyer preferences will continue to shift the market in the coming years," added Marshall. "With high fuel prices, perceived dependency on foreign oil and an increased focus on environmental issues all being top of mind among consumers, manufacturers will not only have to continuously make efforts to produce more fuel efficient vehicles, but also to diversify the range of options."

J.D. Power's study also finds that consumer consideration for purchasing clean diesel vehicles, which were newly introduced to the market in 2007, is at 23 percent. Last year, only 12 percent of shoppers considered purchasing diesel vehicles. On the average, potential buyers of the said powertrain are willing to pay an additional $1,491 for the clean diesel option and expect an average extra fuel economy of 15 mpg.

In the Automotive Environmental Index, the Toyota Motor Corp. is the highest-ranking nameplate, followed by Volkswagen AG and the Honda Motor Co., respectively. Toyota has improved by six rank positions since last year's study. It also has a strong showing with both hybrid and traditional models. Honda also ranks well, with four models in the top 30. The Ford Motor Co. and the Nissan Motor Co. follow, each with three vehicles. are still dominating the realm.

Same with the 2006 results, there are only two luxury models in the top 30 - the Lexus GS 450h and RX 400h.

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