The print edition of Auto, Motor und Sport (March 13, 2008) carries an interview with GM Car Czar Bob Lutz. Regarding February sales, Maximum Bob told the German car mag “everyone was down strongly, including Toyota;” forgetting that Nissan and Honda were both up for the month. MB also “reveals” that GM’s hybrids are selling “increasingly better” and “the mild-hybrid system in the Malibu and Vue are selling well;” forgetting that GM sold just 577 hybrids in March, less than 30 of which were gas – electric ‘Bus and Vues. Lutz also says “Hybrids are not an economic or practical solution. Driving with two power sources leads to higher costs that the buyer can never recoup;” forgetting that the Prius can recoup its premium in less than five years. Note to Bob: the truth will set you free.
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There is definitely a disconnect between the world Emperor Lutz lives in and the world the rest of us live in.
I enjoy reading (and listening to, too) his statements because they feel so utterly outlandish, so ridiculously constructed, I feel as if I am viewing modernist abstract art. Put through a blender. Then set on fire. How can you not appreciate that?
Aw shoot, I’ll repeat this here also-
“Compare the Prius interior dimensions to the mid size pack. It’s solidly in that range (nearly identical to the 08 Bu in CRs measurements).
The luggage area is on the large size.
Price vs. 4 cyl base competition? Plus $1-3k.
Even better, the buyers extra cost is usually spread over 3-5 years and save 20+ gals a month (15k/yr ave, 45mpg vs 25 mpg). Most will save money from DAY ONE.”
The cost turnover analyses on the Prius typically make two important mistakes.
1. They size it by the exterior rather than the interior (the part that determines it’s utility).
2. They put the added cost all at point of purchase. How many people pay cash for a new car?
MB should note a few other differences with Toyota’s situation vs GM’s.
A. They are PROFITABLE. The can ride this out for a long time, and buy all of the Debt3 and throw them away and still be in better shape than GM today.
B. They are losing less sales than the total market. They are GAINING market share. GM is performing near the bottom of the market, they are LOSING market share.
C. Toy has flexible plants and workforce. GM has overlapping models and the UAW.
D. Toyota is the most preffered customer of most vendors (annual PPI study). GM is typically vying for the bottom with Ford.
MB, you might want to learn a little about the auto industry. Just a thought buddy.
(Was that harsh, or just sarcastic?) ;^D
Love and bullets,
Bunter
Five years? not according to the Toronto Star:
When it uses its electric motor or generator instead of its gas engine, a hybrid vehicle can sip less fossil fuel and emit fewer tailpipe emissions than its gasoline-only counterpart.
But despite the potential for reducing fuel costs, does driving a hybrid vehicle really save money?
What are the real financial economics of “going green?”
To find out, we looked at three popular vehicles that offer gas and hybrid versions: Ford Escape, Saturn Aura and Toyota Camry.
We then estimated the complete costs of ownership over a seven-year lifespan, which is how long most Canadians typically own a vehicle from new.
Based on driving an average of 24,000 km per year (typical of most leases), we made sure to include all those often forgotten financial factors like destination charges, financing, taxes, government energy rebates, insurance – as well as the cost of fuel.
Because the majority of Canadians finance their new vehicles, our gas-versus-hybrid cost estimates first involved a “virtual” zero-down, 48-month factory lease with 96,000 free km.
All factory finance rates and residuals were based on March 2008 numbers, which may change in April.
We then “bought” the vehicle at its lease buyout value with a bank loan at 7.75 per cent annual rate – 2.5 over prime – for a final three-year term.
Because all three automakers offer three-year/60,000 km bumper-to-bumper and eight-year/160,000 km warranties for the unique hybrid components, with actual costs heavily dependent on individual use, we left this out of our cost estimates.
In regards to insurance costs, for our purposes, we used a 40-year-old male living at the Star’s Yonge St. address.
(Surprisingly, the differences were within tens of dollars per year in favour of the gas-only models.)
Automakers themselves like to market hybrids against thirstier V6 gas models.
“The Camry Hybrid offers the same level of performance as the V6 gas models,” says Toyota, a claim Ford Canada also makes for its’ Escape.
But growing concerns about the economy and continually rising fuel costs mean many consumers today are choosing thriftiness over performance.
Therefore, we’ve compared similarly equipped four-cylinder models against the hybrids.
One thing to keep in mind: in the case of Ford and Toyota, the hybrid version includes costly options not on the gas version.
Hybrids are expensive to develop, and adding high-margin options can help recoup some costs.
If you’re counting pennies more than kg of CO2 saved, even the Camry Hybrid – the most fuel efficient vehicle here – ultimately costs an estimated $1,298 more over seven years to own than its conventional gas counterpart, mainly due to its initial purchase price and a higher end-of-lease buyout.
There’s no argument: Drive a more fuel-efficient vehicle, and you’ll cause fewer emissions.
But as gas-vs.-hybrid cost comparisons prove, driving a hybrid does not equate to saving money.
After 168,000 km, an Escape Hybrid would emit an estimated 26,530 kg less CO2 than the gas XLT model– the greatest savings of this trio. But there is a real, measurable cost to “going green.”
At $1.50 a litre for gas, for each kilogram of CO2 saved, it costs an estimated 53 cents in the Ford hybrid.The Saturn works out to 14 cents and Toyota 7 cents.
But realistically, it would take European-like gas prices of $2 a litre before even a highly fuel efficient vehicle like the Camry Hybrid would start paying a return.
Even then, after 96,000 km, the amount would be about $900.
Unfortunately, when it comes to the economics of hybrids, there’s no free lunch.
Whenever I reak a Bob Lutz quote, I keep thinking of the following…
“He would make outrageous claims like he invented the question mark. Sometimes, he would accuse chestnuts of being lazy. The sort of general malaise that only the genius possess and the insane lament…”
-Dr. Evil
Lutz is, broadly, right. But the people buying Priuses are not buying them based on strict economics.
There’s as much ‘want’ in car purchases as ‘need’, and some people ‘want’ what the Prius purports to provide. Just as when I go out to buy a CTS-V next year, my decision won’t be based on need, and my set of ‘wants’ has nothing to do with reducing CO2 output.
To be a success at GM’s size, you need to appeal to as broad a possible set of ‘wants’ as possible.
Toyota knows this, even though they appeal to almost none of mine. It’s why they just shipped a big new Sequoia and a new Land Cruiser. It strikes me that they’ve completely missed a trick by not bringing in the diesel Land Cruiser, though.
The print edition of Auto, Motor und Sport (March 13, 2008) carries an interview with GM Car Czar Bob Lutz. Regarding February sales, Maximum Bob told the German car mag “everyone was down strongly, including Toyota;” forgetting that Nissan and Honda were both up for the month. MB also “reveals” that GM’s hybrids are selling “increasingly better” and “the mild-hybrid system in the Malibu and Vue are selling well;” forgetting that GM sold just 577 hybrids in March, less than 30 of which were gas – electric ‘Bus and Vues. Lutz also says “Hybrids are not an economic or practical solution. Driving with two power sources leads to higher costs that the buyer can never recoup;” forgetting that the Prius can recoup its premium in less than five years. Note to Bob: the truth will set you free.
Good old Lutz. Where to start … Toyota’s sales were down primarily due to the Corolla model changeover. Lutz’ comment on hybrids is not only woefully incorrect, it’s also ironic and hypocritical given some of the statements made by Lutz and others at GM regarding hybrids over the past few months.
philbailey, that was a silly article by the Toronto Star. They obviously did NOT look at complete costs of ownership. What about maintenance, especially long-term maintenance? What about the fact that Toyota for example offers an 8 year warranty on hybrid components, as opposed to a much lesser warranty on the rest of the car?
I’m always amazed at how ignorant and short-sighted critics of hybrids, especially of the Prius are. There are studies out there that show over a 5 year period a Prius will save thousands of dollars compared to a Corolla. Not just in fuel economy, but in maintenance costs as well.
Has nobody even bothered to think why Toyota offers such a long warranty on hybrid components? Perhaps it’s because electrical components are more reliable than mechanical components?
Fact is, the Prius IS more reliable than a regular car, and the Prius over several years DOES end up saving you a significant amount of money compared to a regular car.
I tend to agree with Phil Bailey about Hybrids, one of the worst features that cost money is that a Hybrid vehicle has to be maintained at a Dealer of same, more costs to the owner as he/she is not able to take his vehicle to an independent garage!
Whats going to happen when the Hybrid battery needs to be replaced, who is going to take it in to be junked or whatever? Lots of decisions, I do agree
that the Toyota system is a lot better than is the hybrid in the GM line.
Lutz is exhibiting typical H. sapiens behavior. Denial is a very common trait in our species.
Lutz also says “BAS Hybrids are not an economic or practical solution.”
There, fixed for ya, MB.