Buyers
want cleaner cars, but without any sacrifices.
Eric Morath / The Detroit News
If actions speak louder than words, some might wonder what all the environmental
fuss is about in the auto industry.
While consumers overwhelmingly say they want cleaner, more fuel efficient
vehicles, they don't want to pay a premium of up
to $10,000 or compromise on performance.
Less than 6 percent of vehicles sold in the United States last year were
equipped with alternative powertrains
-- mainly gasoline-electric hybrid cars and diesel trucks based on sales
through November.
Still, automakers and industry experts agree that a green revolution is under
way, evidenced last year by growing sales
of fuel-sipping models, including subcompact cars and hybrids, as demand
for sport utility vehicles plummeted.
Rising gas prices and concerns about global warming and dependence on foreign
oil are driving demand for
greener vehicles, said Chrysler LLC Vice Chairman and President Jim Press.
"We are at the dawn of a renaissance for the automobile," he said. "The
market has become more thoughtful on these
issues. It's no longer a niche, it's a progression."
To overcome buyers' apprehensions about the higher cost of advanced vehicles
like hybrids -- the premium can be
as low $2,000 with tax breaks -- and uncertainty about new technology, automakers
are stepping up their green
marketing efforts.
Raising consumer awareness should boost demand, driving up production and
bringing prices down. Diesel and hybrid
vehicles will account for 13 percent of U.S. vehicle sales by 2012, helped
by stronger marketing. Ongoing worries about
gas prices and the introduction of more green models to meet higher federal
fuel economy mandates should also drive up sales.
For now, though, while 83 percent of car buyers say they are interested
in alternative fuel vehicles, the notion that consumers
are already running toward green vehicles is overstated.
Some hybrids and other vehicles already achieve fuel economy at or near
the new 35 miles per gallon standard the government
set for 2020. The technology is out there. If consumers really cared about
fuel economy, wouldn't consumers flock to them?
Currently they are'nt.
Many customers still fear that driving a more fuel-efficient vehicle will
require major sacrifices in terms of performance.
Selling the first hybrid vehicles was relatively easy.
When Toyota launched the popular Prius hybrid in 2001, buyers were eco-minded
techies with deep pockets.
Today's buyers want better gas mileage and lower emissions from vehicles
that are reliable and safe; and they are
much more price-sensitive.
For consumers to buy in, they have to understand the benefits. So just as
automakers advertise "five-star" crash test ratings
to promote vehicle safety, fuel-economy, alternative fuel options and other
green features will gain more prominence in
automotive marketing.
The challenge for automakers is that customers say they want to buy greener
vehicles from greener companies,
but they don't always make that choice on dealer lots.
There are clearly two categories of buyers: True environmentalists willing
to pay a premium and make an extra effort to
contain pollution, and everybody else.
Most people fall into an area called selective contributors. These are people
who tend to choose the ecological option
if it doesn't cause them inconvenience.
Mercury Mariner Hybrid - now comes the hard
part.
Automakers are targeting green-minded consumers in varying ways. Nissan and
Chrysler offer a range of environmentally
friendly options, including hybrids and diesels.
General Motors Corp.'s Chevrolet brand takes the idea of a broad approach
even further. In its "Gas friendly to gas-free"
campaign, GM bills Chevy as its environmental brand with fuel efficient cars
today and vehicles that will run without gas
in the future. (The far future).
Leading that charge is the heavy marketing of the Chevy Volt, a plug-in concept
car. In an unusual move, GM created
everything from billboards to television commercials about the vehicle, which
customers can't even buy yet.
The marketing is intended to portray GM as aggressive on green and to create
a "halo" that draws customers to higher
mileage models already in GM's lineup. Ford Motor Co. is also using the allure
of hybrid technology to attract buyers.
When the automaker last year launched its redesigned Mercury Mariner, it heavily
promoted the hybrid option, even
though the vast majority of Mariners are sold with standard powertrains.
When Toyota launched the Prius in the United States earlier this decade, its
marketing tactics reflected the vehicle's niche
status. Instead of television commercials, Internet viral marketing told
the story. Hollywood stars, such as Cameron Diaz,
professing their love for the clean machines on late night talk shows, didn't
hurt either.
As hybrids move into the mainstream, so is Toyota's marketing. The automaker
still does grassroots barnstorming at
fairs and auto shows, but it generally markets hybrids just as it does its
other cars and trucks.
Toyota dealers are stocked with videos and marketing materials that explain
hybrid technology, but deralesr rarely have
to convince a customer to consider a hybrid. A hybrid buyer arrives as a
buyer they are the most educated customers
on any product.
Those who consider Toyota's three hybrid vehicles are concerned about gas
mileage, but many are also looking to
make an environmental statement. Even though gas savings on a hybrid are
unlikely to offset the hybrid premium
during the course of a three-year lease, many customers still lease the vehicles.
When customers buy an alternative vehicle, they most often look at hybrids
or models with diesel engines, which are
more fuel-efficient than their gasoline counterparts. But the best selling
alternative models are flex-fuel vehicles capable
of running on gasoline or E85, a high ethanol-gasoline blend.
Numerous big-volume vehicles, including the Chevy Impala, Ford F-150 and
Dodge Grand Caravan, are sold as flex-fuel
vehicles. But that capability is rarely the main factor in a sale because
E85 is not readily available, with only about 1,000 E85
pumps nationwide.
Running a vehicle on E85 actually results in lower gas mileage, but supporters
like it because it mainly comes from a
renewable source, corn, and lessens the nation's dependence on foreign oil.
Green vehicles won't truly become mainstream until there are numerous options
to meet specific regional needs.
Ethanol, or E85, will be most popular in the corn-producing states of the
Midwest; hybrids will rule in stop-and-go coastal
city driving and diesels will appeal to long-distance, freeway travelers.
For that to become a reality, automakers and dealers must turn consumers
on to the new alternatives, if and when they arrive.