Hybrids Toast Of Detroit Auto Show, But Many Warn Growth Is Limited

While hybrids were the talk of the Detroit Auto show, Nissan chief operating officer Toshiyuki Shiga, sees a limited market. "I don't think that hybrids will occupy the majority of the market because the hybrid price is still higher than the customer's value," he said. That's why, in addition to introducing a hybrid Altima later this year, Nissan is expanding its offering of vehicles with a continuously variable transmission which reduces fuel consumption by 10% without sacrificing performance.

A big barrier to the sales of hybrid vehicles is the high sticker price, costing on average $3,500 more than their gasoline equivalents. It would take most consumers years to recoup the initial cost in terms of gas savings. Automakers should be able to bring the cost of hybrids down once volumes increase, General Motors chairman Rick Wagoner said after he launched two new hybrid sports utility vehicles. "I don't think anybody makes money on hybrids," he said.

Hybrid gas-electric vehicles have seen stunning growth in the U.S. market as gasoline prices doubled and people became more concerned about the environment. The hybrid-electric vehicle market has grown from two models and fewer than 10,000 vehicles sold in 2000 to 11 models and an estimated 212,000 vehicles sold in 2005. Sales are forecasted to more than triple to a 780,000 vehicles in 2012 as another 51 models are introduced, according to California-based J.D. Power and Associates Automotive Forecasting Services. But they would still only make up 4.2% of the vehicles sold.

While acknowledging that "hybrids will be here for quite some time," Chrysler Group chairman Tom LaSorda said that diesel and other technologies such as ethanol-fueled vehicles offer good alternatives for reducing emissions and fuel consumption. DaimlerChrysler introduced what it calls cleaner diesel engines to the U.S. market on Jan. 8 which offer similar improvements in fuel economy without the hefty hybrid price tag.

But while diesel is more powerful than gasoline, it also is dirtier, particularly with the smog forming pollutant nitrogen oxide and the acid-rain causing pollutant sulfur. European regulators tightened standards on diesel fuel years ago and then used higher taxes on gasoline to entice consumers to buy diesel vehicles. In the U.S., the cost of the two fuels is just pennies apart and only about 3% of vehicles sold every year are diesel, compared with around 40% in Europe. Sales have already started to pick up, Volkswagen brand chairman Wolfgang Bernhard said. The company saw a tripling of interest in diesel vehicles to 20% of vehicles sold among models which offered the option.

Copyright Agence France-Presse, 2006

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