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Auto Outlook: Are hybrids being overhyped?

By AL SWANSON, United Press International   |   April 15, 2012 at 5:30 AM
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One of my neighbors has a Prius and considering another one.

She bought a used second generation Prius a few years ago and says another is on the agenda before she or the Japanese hybrid's batteries run down.

Like many Prius owners her enthusiasm for the Toyota hybrid was zealous. In the first few weeks she owned it she offered practically every neighbor a chance to drive it, often stopping on her way to her parking space to call out that the car was running totally silent on battery power.

I live in a college town where it's not uncommon to see a first-generation, three-door hatchback Honda Insight gliding down the street. Some of those early wedge-shaped subcompact two-seaters -- produced from 1999 to 2006 -- are more than a decade old. They got 53 mpg but were too small and offered too few options, like air conditioning, to generate the mass market appeal of the larger Prius sedan.

The second generation Insight is now a fully equipped, five-door compact hatchback that gets around 38 mpg in combined city/highway driving. Honda sold 143,015 Insights worldwide in 2009, most of them in Japan, and at less than $20,000, the car remains the least expensive hybrid available in the United States.

The car love of a smitten hybrid owner may be contagious but a survey indicates the desire to buy a second one is not, even though the 30 or so hybrids available are much improved over first- and second-generation vehicles.

A study released by automotive information and marketing specialist R.L. Polk of Southfield, Mich., found in 2011 only 35 percent of U.S. hybrid owners bought a hybrid again. A hybrid buyer typically pays a $5,000-$7,000 premium over a conventional gasoline-powered vehicle for the hybrid's batteries and advanced technology -- and it takes years to recover those costs depending on the number of miles driven and the price of gas.

At 60 percent, Toyota hybrids had the highest brand loyalty among hybrid owners, Polk said, while 41 percent of Toyota hybrid owners bought another hybrid of any brand.

About 52 percent of Honda hybrid owners stayed with the brand, while fewer than 20 percent of Honda hybrid owners purchased a hybrid of a different brand in 2011.

"Having a hybrid in the product lineup can certainly give a brand a competitive edge when it comes to attracting new customers," said Brad Smith, director of Polk's Loyalty Management Practice, in a release. "The repurchase rates of hybrid vehicles are an indication that consumers are continuing to seek alternative solutions to high fuel prices."

Hybrids sales are still a drop in the bucket of total vehicle sales, accounting for just 2.4 percent of all new vehicles sold in the United States -- down from 2.9 percent in 2008.

"The lineup of alternate drive vehicles and their premium price points just aren't appealing enough to consumers to give the segment the momentum it once anticipated, especially given the growing strength of fuel economy among compact and midsize competitors," Edmunds.com chief economist Lacey Plache said in a release.

Rising gasoline prices and the eventual expansion of recharging stations throughout the country are expected to spur sales of gas-electric hybrids and plug-in electric vehicles.

"For EVs [Electric Vehicles] and PHEVs [Plug-in Electric Hybrid Vehicles] in particular, certain obstacles, including consumer unease with unfamiliar technology and the lack of adequate recharging infrastructure, will need to be overcome before sales increase," Plache said.


Mixed feelings on the auto bailouts

A Harris Interactive Poll finds the U.S. public divided on the federal bailout of the auto industry, with 45 percent saying the 2009 emergency government financing that saved General Motors and Chrysler helped the economy and 29 percent saying it hurt the economy.

Opinions split along political lines, with 59 percent of Democrats saying the bailouts helped while 33 percent of Republicans and 48 percent of Independents agreed.

With GM and Chrysler both posting profits again, 70 percent of survey respondents oppose any further government help for the auto industry. Not surprising since all of the Detroit Three are hiring again after returning to profitability.

The Harris poll of 2,451 adults was conducted online March 12-19. No margin of sampling error was given.


Cars sales slowing in India

India is one of the key emerging markets targeted by carmakers, but timing may be everything.

The Wall Street Journal says car sales in India, the third largest automobile market in Asia after China and Japan, rose 2.2 percent in the 12-months ending March 31, reaching 2.02 million vehicles. Sales are still going up but new car sales in India were growing at their slowest pace in years.

The data was released by the Society of Indian Manufacturers, which blamed the lagging car sales on rising fuel costs, expensive vehicle loans and inflation.

Sales of diesel cars were up in India because of government -controlled prices for diesel fuel, the Journal said.


Dream Machines: Flying cars

If you have an extra $279,000, you can reserve a two-seat flying car developed by a group of MIT-trained engineers.

Called The Terrafugia Transition, the two-seater runs on unleaded 91-octane premium gas rather than more expensive aviation fuel, and a licensed pilot with as little as 20 hours of instruction can fold down its wings and take off and land at a public airfield with a 1,700-foot runway.

"Don't think of it as a car that flies. Think of it as a plane that drives," Terrafugia founder and Chief Executive Officer Carl Dietrich told MSNBC. Dietrich, a pilot and aeronautical engineer, developed the flying car with five former Massachusetts Institute of Technology students.

The Transition is 19 feet long and has a wingspan of 27 feet. With its fixed wings folded it can fit inside a regular garage.

The 100-horsepower, pusher-propeller experimental aircraft had a successful eight-minute test flight in Canada in March and could be cleared for sale by the Federal Aviation Administration and National Highway Transportation Safety Administration in 2013 making it the first "street legal" airplane.

The developers estimate mileage at 35 mpg on the highway and 23 to 28 mpg in the air, depending on drag, with a flying range of 644 miles on a full 23-gallon tank. Top speed is around 105 mph in the air and on the ground.

The Woburn, Mass., company, which showed the prototype at the New York International Auto Show, has about 100 pre-orders.

Also close to production is the PAL-V (Personal Air and Land Vehicle) -- a three-wheeled, two-passenger Dutch gyrocopter whose rotors fold on top and rear-mounted propeller folds automatically.

The Netherlands PAL-V is being test flown and would have an expected price tag of about $300,000. Flying range is 315 to 350 miles, with a top air speed of 110 mph.

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