Hybrids are here: Customers, not so much

Jan. 10, 2012 at 12:24 PM
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DETROIT, Jan. 10 (UPI) -- Alternative fuel systems for cars are on display at the Detroit auto show, but analysts said the segment lacks one vital ingredient -- customers.

Ford Motor Co., BMW, Volkswagen, General Motors, Honda, Mercedes, Chrysler, Volvo and others all have electric plug-in or hybrid vehicles on display at the North America International Auto Show that opened Monday in Detroit. But, the price of gasoline which, peaked at a national average $3.95 per gallon in 2011, has yet to turn many customers into fans of hybrids.

Research firm LMC Automotive said sales of hybrids and plug-ins dropped to 2.2 percent of all automobile sales in 2011, down from 2.4 percent in 2010, The New York Times reported Tuesday.

"The market is going in one direction and fuel-economy regulations are going the other direction," said Jeremy Anwyl, vice chairman of Edmunds.com told the Times.

"Just because people start building more of something doesn't mean the segment grows," he said.

Auto company executives said they match production with demand, which may mean waiting for the buyers to catch up with the technology.

"We still believe electrification is going to play a big role in the industry, both to meet CAFE (Corporate Average Fuel Economy) requirements and because of customers' sensitivity to gas prices," said Mark Fields, the president of Ford's Americas division.

Consulting firm McKinsey & Co. said the internal combustion engine was not yet an endangered species and would dominate the market through 2030.

As far as hybrids go, "demand is in its infancy," said Russel Hensley, a partner with the firm.

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