'Hot' Hybrids Forecast To Do Slow Burn in Marketplace

Hybrids may be the hottest thing on the market, but their appeal isn't likely to make them a major player in the nation's automobile industry anytime soon.

Hybrids may be the hottest thing on the market, but theirappeal isn't likely to make them a major player in the nation'sautomobile industry anytime soon. That's according to Anthony Prattof the research firm J.D. Power and Associates.

J.D. Power's analysis of hybrid sales for the next six years projectsthe number of available models to grow from eight last year to 38 in2011, and sales to grow sixfold from 88,000 to 535,000 the sameperiod.

Even at that level, however, hybrids will only represent roughly 3percent of the overall domestic car and truck market, J.D. Power'sreport says. It is forecasting sales of the gas-saving combinationelectric-combustion engine vehicles to hit 200,000 this year, with atleast 11 models on showroom floors.

That news comes at a time when gas prices are expected to jump 24cents a gallon in the next few days because of big price hikes foroil and wholesale gas. As of Thursday, light, sweet crude oil forApril delivery traded as high as $55.20 a barrel. It closed on Fridayat $53.78. If gas price hikes do hit 24 cents a gallon, unleadedgasoline would sell for a nationwide average of about $2.16 a gallonnationwide.

Price is a big deterrent for some people, said Pratt, senior managerof global powertrain forecasting at J.D. Power-LMC AutomotiveForecasting Services, a division of J.D. Power.

The savings for most people who get hybrids is about $500 a year infuel costs, so to recover the extra $3,000 to $4,000 that it costs tobuy one, it will take at least six years for most people. And mostcar owners don't keep their cars that long.

Other forms of gas-saving technology also are coming on line,including so-called "displacement on demand" or "cylinderdeactivation" features on engines. The systems automatically drop thenumber of cylinders in use from eight to a lesser number undercertain driving conditions, such as cruising on highways, when thefull complement of cylinders operating is not needed.

Cars such as the Chrysler 300C and Honda Odyssey already have thefeature, and GMC and Chevrolet trucks and SUVs are expected to addthem in a year or so. "Some vehicle manufacturers say that this canmake a vehicle 8 [percent] to 10 percent more fuel efficient, simplyby making the engine run on fewer cylinders at times like highwaydriving," Pratt said.

Another option being pursued by car manufacturers are six- andseven-speed automatic transmissions. "The engine with the typical oldthree-speed (automatic) transmission would 'rev' up high before itwould shift and come back down to a lower gear. Then it would revback, and then shift back down. That's not the most efficient use offuel," Pratt said. "With more 'speeds' or 'gears,' and fewer RPMs,you don't get that. "

Other increasingly popular fuel-saving options available now or inthe works include continuously variable automatic transmissions thateliminate gear shifting -- "the car just goes -- like a golf cart,"Pratt said -- and diesel engines. "We expect diesel to be a competingtechnology once they address the emissions issues," he said.

"Right now, diesel is being hamstrung by several things. Forinstance, the sulfur content in diesel fuel here is much higher thanit is in Europe, so we can't now realize the full benefits of dieseltechnology," Pratt said.

J.D. Power says that among hybrid sellers, Chevrolet will be thelargest domestic brand in the market, although that make has only onemodel -- a pickup truck -- that is classified a hybrid right now.

Toyota, which now has more than 60 percent of the hybrid market, isexpected to have the greatest share of the hybrid market through2011. Honda, No. 2 with a 31 percent share, actually will experiencea drop in its hybrid market share to about 20 percent, Prattpredicted.

That coincides with recent remarks from Honda Chief Executive OfficerTakeo Fukui. He told Automotive News that the company didn't planmuch expansion into the hybrid market beyond its current threemodels.

He denied that the company would build a hybrid SUV -- a step alreadytaken by Toyota and Ford. He said the company did not believe SUVowners cared much about fuel economy. "If they look for fuelefficiency, they could shift to a car," Fukui told Automotive News.

Unlike Toyota, which is making hybrids for its luxury Lexus brand,Fukui also said there were no plans for hybrid models for Acura,Honda's high-end brand. He said a hybrid powertrain "is an extremelyexpensive system," and contended that there were less expensive waysto save gasoline, such as the cylinder deactivation system used bythe Odyssey minivan and hybrid Accord.

Toyota, for its part, is plowing ahead with hybrids. At apreintroduction screening of the new hybrid Toyota Highlander,executives said Toyota had experienced "phenomenal pre-launchconsumer response," with more than 100,000 requests for informationon the model.

The company plans to build only 45,000 of the models, however. "Withfour months to go before launch, we anticipate short supply and highdemand," a company spokesman said.


On sale this year:
--Toyota Prius
--Honda Civic Hybrid
--Honda Insight
--Honda Accord Hybrid
--Ford Escape Hybrid
--Chevy Silverado Pickup Hybrid
--GMC Pickup Hybrid
--Toyota Highlander Hybrid
--Lexus R400h
Coming next year:
--Mercury Mariner Hybrid

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