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Future of Hybrids Depends on U.S. Consumers

But Sales Remain Stuck at 1.2 Percent

By Joe Benton
ConsumerAffairs.com

October 12, 2006

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If hybrid cars are going to have a future in the world, they will have to sell in much greater number in the United States, an Audi engineer warns.

"The future market development has only limited predictability so any decision is tainted with uncertainties," Audi hybrid project manager Marius Lehna said.

Roughly 70 percent of the 283,000 hybrids sold around the world have gone to U.S. consumers with 21 percent sold in Japan and just 8 percent in western Europe, where turbodiesels are the most common choice for motorists seeking high fuel economy.

The U.S. is the world's largest car market with around 17 million units sold every year and U.S. hybrid sales remain at just 1.2 percent of all newly-registered vehicles, according to Lehna.

"If the market in the U.S. does not grow significantly faster than it has until now, one should assume that the volumes per model will remain low. This would then mean that it could become increasingly difficult to manufacture and sell hybrids in commercially sensible volumes," the Audi engineer said.

Integrating two powertrains in one vehicle increases costs considerably, and automakers are finding it difficult to pass those coast along to consumers, he warned.

Lehna said that while the Toyota Prius dominates the U.S. hybrid market, making up half of all new hybrids sold, other models are struggling, including the Ford Escape, Honda Civic, Honda Accord Honda Insight and even Toyota's own Highlander and Lexus RX 400h.

Hybrid consumers tend to be people in their 50s with above average education and incomes above $100,000 per year.

"It is by no means the young, dynamic consumers that buy a hybrid vehicle but rather an intellectual upper class," the Lehna said.

Audi and its parent, Volkswagen, are developing hybrid technology with German sports car maker Porsche.

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