Poor Ford. All they wanted to do was claim to offer “the most efficient midsized car in America.” “We’ve been pretty clear, probably annoyingly clear, to Toyota that we’re comparing Fusion to Camry,” Ford spokesman Mark Truby tells USA Today (via Daily Tech). After all, the Camry gets a paltry 33 city/34 highway rating from the EPA. At 41/36 mpg, the Fusion is clearly a more efficient mid-sized car than the Camry. But wait!
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Leave it to a Texan to spin a subsidy of plug-in hybrids as a “damn the greenies and all things Washington, DC” move. Hard to believe, but that is what Gov. Rick Perry just did in his recent State of the State address. It’s an entertaining read for those who enjoy reading between the lines. Perry starts by decrying big spending interventionist government; then goes on to ask for more money for the state’s Emerging Technology Fund, Film Incentives, Enterprise Fund, Skills Development Fund, the Texas Grant Program, the Workforce Commission’s Skills Development Fund …. well, you get the idea. But wait, this is The Truth About Cars, not The Truth About Government (someone start that site, ‘kay?).
The talk about US-based A123 receiving federal and Michigan taxpayer funding to ramp up American-made batteries for the plug-in electric – gas hybrid Chevrolet Volt seems to have been much ado about nothing. The AP (via Yahoo) reports that GM “has picked LG Chem of South Korea to supply the lithium-ion battery cells for its Chevrolet Volt.” Apparently mindful of its precarious political situation, GM makes a big deal about the South Korean cells being “assembled into battery modules and packs at a factory in Michigan.” In the mid-80s, I was a young engineer in Silicon Valley’s then booming semiconductor industry, and we outsourced the low tech, low value added final packaging and assembly offshore to places like South Korea, Taiwan and Singapore. Back then, the high value added R&D and primary manufacturing still largely happened in the US. My how times have changed.
“The Honda engineering team wanted something different from the Insight. They wanted a hybrid that was appealing to drive. Fortunately they already had a small car that met that criteria: the Fit. So, naturally, the important dynamic bits of the Fit form the basis of the Insight. The entire front structure of the Insight is in fact common to the Fit. Compared to the Fit, the rear axle has been moved back two inches and the roof has dropped 3.8 inches. Inside, the roof sits two inches closer to the front seat and three inches closer to the rear. That means that occupants in the Insight sit lower to the ground and have a cozier feeling than in the Fit, but the new Insight actually ends up feeling sportier than either the Fit or Prius.” Oh, and ABG achieved a claimed 63.4 mpg.
Reported sales of hybrid cars were down by ten percent in 2008, according to Green Car Congress, who keep track of these things. Keep in mind that 2008 was the year that saw $4+ gas, $7k Geo Metros and a general wave of related hysteria. On the other hand, gas has also become quite cheap in the last few months, and hybrid sales are undeniably falling off a cliff. December hybrid sales are down 42.7 percent year-on-year, as Priora pile up on lots and Americans re-learn how to save money. But is the hybrid downturn a sign of a dying fad, or a temporary blip? There’s a strong argument to be made that the hybrid price premium will be a tough sell in weak economic times, but if another oil shock comes that premium could look like chump change. But this is not just a question of predicting the oil market. If any of us could really do that, we’d be doing the backstroke in a Scrooge McDuck-sized vault of ducats, not discussing the auto industry. Toyota thinks that they can whittle the hybrid powertrain premium down to a mere $1,500 over normal ICEs, but then they built the hybrid bandwagon nearly single-handedly. Meanwhile, Honda is attacking the Prius on price point with the Insight, and Ford is going after the Camry on patriotism with its Fusion hybrid. But will this competition saturate a still-niche market and destroy profitability? After all, hybrids still only make up 2.4 percent of the US market, causing some to call hybrids a dying fad. Or will hybrid technology eventually become ubiquitous, rewarding those who made early investments in it?
Wow, Manny. You need to get with the program bro’. Dissing hybrids is not gonna make you any friends. Not in DC. And not with your hometown homies, who know that global warming is a crock of “I can’t believe it’s not Toyota” with which to butter their bailout bread. What are they gonna say when they read this? “They cost more than most people can — or will — pay; they provide fuel efficiency benefits only for specific and limited driving conditions; and the technology isn’t going to solve America’s oil issues. Sure, they’re still somewhat trendy, and select members of Congress as well as Hollywood hypocrites regularly remind people that they drive the so-called green machines. Good for them and for the few others in America who are all hopped up on hybrids, but they are the few and the proud. And the declining.” Yeah, we know that Manny. But what if gas prices go back up? You know; if there’s a sudden disruption of oil supplies due to tensions in the Middle East or another speculative bubble? It could happen. Not in Manny’s world. And the News’ Auto Editor wants to point out– again– that consumers are friggin’ hypocrites…
We all know that November was a bad month for car sales. Come Monday, we’ll know how bad December was, and with it the whole year. Don’t expect any positive surprises. Pop quiz: What was the worst segment? The much maligned SUVs? Nope, they are back in vogue, kindof. It’s hybrids that suddenly are on the endangered species list. “Americans’ appetite for hybrid cars is evaporating as tumbling fuel prices and tighter household budgets trump environmental concerns,” writes the Financial Times (sub.)
Yes, bound for extinction are the same cars that were the conveyance of choice for Detroit’s CEO’s during the second round of hearings. One of the hottest segments a few months ago is now a thin slice of its former glory. We’re talking the same hybrids that sucked up billions of investments, and were the target of $25b of Department of Energy “retooling loans.” With gas back to normal, hybrids are going out of style bigtime.
Toyota had planned on beginning production of Priora at its Blue Springs plant in 2010, but those plans are now on hold indefinitely, according to the AP (via CNN Money). According to ToMoCo spokesfolks, construction of the plant is 90 percent complete, but installation of its machinery and tooling (the “most time-consuming elements”) has been delayed. And what of the 100-odd folks hired to oversee construction and install human resources plans? “Those people’s jobs are safe, and we’ll find things for them to do,” says Toyota’s Mike Goss. With weak sales affecting even the once-hot Prius, Toyota is responding quickly by holding off on a hiring binge until the market begins to recover. Consider the Tundra lesson learned, but in tough economic times those jobs will be missed. As will the $239m state incentive package, not to mention the $235m in tax revenue that the plant is expected to bring in over its first ten years of operation.
For some companies, the ongoing financial crisis will be fatal, but for others, it may turn out to be a historical opportunity to re-define themselves. When weak brands disappear, others can fill their niche. Honda, for one, seems to be one of the first car makers to seize the opportunity that the industry’s re-structuring is providing. “Where we want to be by 2015 is the environmental leader. I mean that in a credible sense, not a greenwash sense,” Chris Brown, the head of marketing for Honda Motor Europe, told The Guardian. Which is easy to say, although Brown says Honda does support an eco-rating system to prevent misleading environmental advertising claims. But the first step in this branding conversion was announced last week, when Honda said it would be terminating its Formula One activities and re-assigning its F1 engineers to work in eco-technology. Egads! Is Honda about to put all that talent towards becoming the car for the dour, anti-car league? Honda is directing its $150m+ ad budget for Europe and Africa towards addressing this question. As Brown puts it, “We want to change the conversation completely. At the moment everything is heavy-handed, preachy and overwhelming. We want it to be positive, optimistic, joyful, powerful.” Read More >
This is the first official shot of Honda’s upcoming Prius-fighter. And if anyone can take on the Prius (which despite being down 50% in November compared to November 2007, still sold 8600 units), it’s Honda with this car. I say that because (1) Honda has genuine hybrid building experience with the Insight, and (2) unlike previous hybrid efforts from many manufacturers, it’s not merely a hybridized version of an existing car. It looks unique, and that carries the image that’s so critical in the hybrid market. Previously, we reported that the Insight was targeted to go on sale this Spring for less than $20,000. With continuing reports that Toyota may be taking a loss on every Prius, I’m not sure how Honda plans to pull this off. Still, if you’er into this sort of car (and I’m really not at all), you probably won’t care what Honda’s bottom line is.
Fisker seems to be getting a handle on the whole car-company routine, joining the now-proud tradition of leaking images to the web to build hype leading up to a launch. Of course that’s a little bit harder when your production model is nearly unchanged from the concept, but these considerations don’t bother anyone else in the industry. Anyway, the $88k Karma is said to get 50 miles of all-electric range before its GM Ecotec engine kicks in to generate more juice. Top speed is listed as 125mph, and 0-60 should take 5.8 seconds. Production at Valmet’s facilities in Finland will eventually reach 15k units per year, and the first deliveries will take place in fall 2009. We will bring you complete photos when the Karma debuts in Detroit this January.
A quick reminder: the Toyota Prius OWNS America’s hybrid market. Year-to-date, the Japanese automaker’s sold 142,365 Priora. Even during October’s carpocalypse, at a time when gas prices have fallen back to pre-Katrina levels, ToMoCo shifted 11,804 of the gas – electric hybrids (down “just” 13.6 percent). All other hybrids– including Toyota’s Camry gas – electric variant– must live off of crumbs from the Prius’ table. So when Ford announces it’s about to sell a hybrid Fusion with better mileage than the Camry hybrid– a six (according to the press release) or five (according to Automotive News) mpg improvement around town and an indeterminate number on the highway, the words “big whoop” spring to mind. Or even, perhaps, why bother? Certainly the Gods of Corporate Average Fuel Economy must be satiated. But doesn’t Ford have to sell the vehicles for them to count against F-150 mpgs? As for the badge-engineered Milan hybrid, well you gotta put Mercury’s babe on your website! In your garage? Not so much. (The car. Not Jill.) More interesting: SmartGauge™ with EcoGuide. The doo-hickey “coaches” hybrid drivers to maximize fuel efficiency. John Madden voice prompts optional, presumably. Oh, and props to The Blue Oval Boyz for improving the 2.5-liter I4 Fusion for better torque, and offering a six-speed manual.
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