NFS4
No Lifer
http://www.thecarconnection.com/Industr...thinks_Hybrid_Strategy.S175.A8928.html
For Toyota, it's a question of whether the tank is half-empty or half-full. The automaker is the unquestionable leader in the fast-growing U.S. hybrid-electric vehicle market. But HEVs are coming under increasing criticism for failing to deliver the sort of mileage manufacturers like Toyota are promising.
The Japanese automaker's Prius has become the world's best-selling hybrid, while the U.S. has become Toyota's biggest market for the gas-electric midsize sedan, accounting for about 60 percent of worldwide Prius sales. With additional hybrids coming into production, such as the recently launched Lexus RX400h, Toyota is looking to sell one million hybrids annually by 2010, according to Don Esmond, senior vice president of automotive operations for Toyota Motor Sales, U.S.A., Inc., and "if you put a pencil to that, (the U.S.) would be doing 600,000."
The question is what it will take to get there. While the recent run-up in U.S. fuel prices has made the economic equation for hybrids increasingly attractive, that may not be enough to nurture a truly mass market. And in the coming years, Toyota and its Lexus luxury arm are likely to shift focus to expand the appeal of HEVs, according to senior company officials.
After a slow and uncertain start, many analysts have come to agree that hybrids are gaining momentum, aided in part by the run-up in U.S. fuel prices. But other observers remain skeptical.
"We see the general desire for these types of vehicles growing," said Jeff Martini, vice president of the Polk Center for Automotive Studies. "However, the compelling argument to actually buy one has to be made more strongly," he added.
Critics contend that the cost of hybrid hardware - generally adding $4000 to $9000 to the price of a comparable gasoline-only vehicle - is difficult to offset through increased mileage, even with $2.50-a-gallon gasoline. "When you just use the argument of fuel efficiency, the purchase of a hybrid car is not justified," acknowledged Kazuo Okamoto, the new head of R&D for Toyota Motor Co., in a recent interview with London's Financial Times.
The equation is only more off-balance when real-world, rather than promised, mileage is taken into account. While Toyota claims Prius gets close to 60 miles per gallon, consumers report it more typically delivers around 40 mpg. Esmond admitted there is a notable fuel economy gap, but insisted it is the result of government tests automakers rely on, rather than any attempt by Toyota to mislead its customers.
And indeed, other hybrid manufacturers, such as Honda, concede similar discrepancies. But none of the HEV makers is willing to provide a more realistic figure, said Honda planning director Dan Bonawitz, because the higher numbers are "a competitive advantage."
Perhaps, but the growing chorus of complaints could sour current and potential owners, some analysts warn. And as a result, manufacturers are looking at other ways to boost the appeal of hybrids. Honda, for example, has been emphasizing the higher performance of its Accord Hybrid, which launches from 0-60 a full half-second faster than the conventional V-6 Accord.
Lexus is also promoting the performance of its RX400h, and the luxury unit's next hybrid could usher in an entirely new line of high-performance HEVs, said the Toyota division's new general manager, Bob Carter. A final decision has not yet been made, but Lexus engineers are developing a distinctly different version of the Toyota Synergy Drive used in the Prius.
Next year's GS450h is expected to feel more like a conventional sports sedan, with a mix of software and hardware changes meant to replicate the feel of a conventional sedan going through rapid gear changes.
"You may see Toyota and Lexus going in two very different directions," Carter told TheCarConnection.com during an interview in California.
But even the Toyota division will put more of an emphasis on performance, added Esmond, during the same interview. It will put more emphasis on the other advantages of hybrid technology, such as the significant reduction in emissions, including the greenhouse gas, CO2.
While hybrids are taking some heat right now, analyst Jim Hall, of AutoPacific, Inc., doesn't foresee a serious backlash over mileage. There are "plenty of other reasons" why they'll continue to gain ground in the U.S. market, he said. In some states, hybrid owners gain access to carpool lanes, even while driving alone. Several cities now let HEVs park without paying at meters. And then there's what Hall calls "the cool factor."
For some Prius buyers, the biggest plus is the positive feedback they get driving their distinctive vehicles down the street. Ironically, Lexus seemed to miss that point with the RX400h. The most common complaint, said Esmond, is not mileage, but the fact that the gas-electric SUV is almost indistinguishable from a conventional RX330. "They want us to badge this thing so people know they are driving a hybrid," said Esmond. (Honda officials admit they've had similar complaints about their Accord and Civic hybrids.)
Toyota is in the midst of a major internal debate over whether it should produce more hybrid-only models, such as Prius, or continue offering hybrid options for its mainstream models. Whatever the ultimate decision, future Toyota and Lexus HEVs will be much more distinctive, Esmond promised.
