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Hybrid Marketers Might Take A Lesson From Toyota

Discussion in 'Prius, Hybrid, EV and Alt-Fuel News' started by Somechic, Aug 3, 2007.

  1. Somechic

    Somechic Member

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    Hybrid Marketers Might Take A Lesson From Toyota
    by Karl Greenberg, Friday, Aug 3, 2007 5:00 AM ET

    AUTOMAKERS, BOWING SEVEN NEW HYBRID vehicles this year, might want to think of ways to make gas/electric cars and trucks scream: "Hey, look, I'm a hybrid." A big visible difference from non-hybrids, big fuel economy gains and a small price difference have determined winners and losers in the growing segment, say market observers.

    High gasoline prices, meanwhile, are helping drive a record market in gas/electric cars this year. Still, with a profusion of hybrid cars in market now and more coming, Toyota's Prius rules, and consultancies say the car will continue to do so: Toyota sold a record 16,062 Priuses last month--a dizzying 50% increase versus the month last year. Year to date, the company saw an 85% increase through July versus the period in 2006. Toyota reported that among all of its hybrids, it saw a 59% increase in sales in the period.

    Toyota, which plans to offer hybrid-powertrain versions of its entire portfolio by 2012, now sells gas/electric versions of four other vehicles, but all of those combined don't come near sales of Prius.

    "Prius is a stand-alone car--it makes a statement on its own," says George Magliano, director of automotive research for the Americas at Global Insight, Lexington, Mass. "You see it on the road and know it's a hybrid. And the issue with this type of vehicle is that people want you to know they have a hybrid."

    Dan Gorrell, president of Auto Stratagem, a research and consulting firm in Tustin, Calif., concurs. "Consider the hybrid Highlander (SUV). It hasn't sold well, partly because it violates a major issue: you need to look different. A lot of why people are buying hybrids has to do with being noticed; it's a self-esteem issue."

    Gorrell says the efforts are driven in no small part by publicity and automakers' desire to position themselves as progressive. "There's been a lot of me-too's. Press has put pressures on manufacturers, and it's gotten into the image arena because if one isn't offering a hybrid then one is an evil gas guzzler. Toyota has played the hybrid card in an interesting way to promote its corporate image."

    Toyota has been moving hybrid metal by offering incentives earlier this year--to offset the government's rescinding of the federal consumer tax break on hybrid purchases--on a car that used to have a six-month waiting list. Although there are now 11 hybrid models for sale in the U.S. market, Prius still accounts for over 50% of all new hybrid vehicles bought in the U.S. According to J.D. Power & Associates, it will continue to dominate.

    The firm also sees hybrids achieving record sales this year, with a 35% increase in sales of such vehicles versus 2006. In the U.S., automakers have sold about 187,000 such vehicles through June of this year, and the firm says the industry is on track to reach 345,000 unit-sales this year on a strong first half.

    Among current hybrid-version models sold in the U.S.: Toyota's Camry, Highlander, Prius and Lexus GS car and RX SUV; Ford's Escape and Mercury Mariner; GM's Saturn Vue and Aura; Honda's Civic and (for now) Accord; and Nissan's Altima hybrid. The latter uses Toyota technology, but Nissan hasn't marketed the vehicle and has only sold 2,800 units this year.

    On the domestic side, Ford has sold over 11,000 units of its Escape hybrid in the first half of this year.

    Indeed, not all hybrids are selling well. Honda has seen a modest 6% increase in sales of its hybrid-version Civic this year--but is discontinuing the hybrid version of the Accord sedan, of which it has only sold 2,304 this year, as it sells down inventory.

    "The hybrid Accord was the wrong price and the wrong concept," says Gorrell, who says Honda's mistake was marketing the car for performance. "People buy hybrids for fuel economy, and they clearly weren't getting that with the hybrid Accord."

    General Motors' Saturn division has hybrids under the Green Line sub-brand of the Vue crossover and Aura sedan. The latter is touted as the lowest-priced hybrid on the market. "I think that GM is doing well with lesser technology partly because the vehicles aren't priced at a premium either, so it's a step in the right direction," he says.

    Mike Omotoso, senior manager, Global Powertrain at J.D. Power, says GM's price premium is between $1,000 and $1,500. GM has sold less than 1,000 of its Aura hybrids since it went on sale in April.

    Omotoso says Prius has done so well because it fires on all cylinders with a unique look and a pure hybrid powertrain (versus hybrid-assist versions) and market adjustments offering lower-priced versions. "You can see from a hundred yards away, it is the only one of the group that can run completely on electric, and it has the best fuel economy out of all of them. Honda sells 300,000 Civics per year, and the hybrid portion is 10% of that--and from a distance it looks like a Civic," he says.

    According to J.D. Power, people are willing to pay a price premium of $2,400 for a hybrid. "One of the reasons the Accord hybrid failed is that it carried a $3,700 premium," he says, adding that it would take ten years to recoup that cost if one were saving $350 per year in gas costs using the car.

    He says the Camry hybrid is the second-highest-selling hybrid car, followed by the Civic hybrid. Among hybrid-powered SUVs, the Toyota Highlander is the top seller, says Omotoso. "Toyota has credibility. They have done a great job of marketing themselves as hybrid leaders, and the Highlander--the non-hybrid version--is already a high-selling truck."

    J.D. Power says the industry will get an infusion of 65 hybrid models--28 cars and 37 light trucks--by 2010, with sales expected to reach nearly 775,000 units, or 4.6% of the total U.S. new light-vehicle market. Both Toyota and GM are testing plug-in hybrids.

    Among the seven new hybrids coming into the market are hybrid versions of Ford Fusion and Mercury Milan sedan; Chevy Malibu; Hyundai Santa Fe; and Toyota Sienna minivan. General Motors will also offer full hybrids on its Yukon, Escalade and Tahoe trucks. Lexus is the first to launch an ultra-premium hybrid with the $104,000 LS 600h, on sale this summer.

    Gorrell says the winners in the hybrid wars will be the ones offering the whole package. "The key will be--do they look different, how are they priced and do they offer that much of an advantage? It had better offer gasoline advantages and look different. That's what's required."

    Karl Greenberg can be reached at [email protected]

    http://publications.mediapost.com/index.cf...22&p=436482
     
  2. MaxLegroom

    MaxLegroom Junior Member

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    The best way for car makers to make a car that screams "I'm a hybrid" would be to rethink their priorities in designing the car. Is it really all that important, for example, for a car to reach 60 in 8 seconds? It's nice, to be sure, but in most traffic, it isn't necessary to keep up. And that's here in southeastern Virginia, where we tend to treat the speed limit as a minimum speed.

    I'm preaching to the choir here, but the reason that other hybrids don't succeed like the Prius is that they didn't think carefully about the car's design from the outset. Along with the trend of cars becoming heavier with each succeeding generation, I tend to think that manufacturers are getting less space out of them for the size involved.
     
  3. christob

    christob Member

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    For me, I honestly do not believe the "Look, I'm a Hybrid" design of the Prius conciously came into play as a deciding factor. I've been interested in a hybrid since I first saw the Insight years ago (but I ended getting stuck in two back-to-back 5 year gas-engine leases.) As a previously-loyal Honda guy, I test-drove the Honda Insight awhile back, and sometimes wish I had one now, just for commuting (where the small size wouldn't matter, compared to a sedan for hauling friends & stuff.)
    When I decided I was finally going to go for a new car this year, I just assumed it would be the Honda Civic hybrid (would've been my 4th consecutive Honda) and thus drove it (as well as the 2007 gas Civic, and the Fit) before I ever sat in a Prius. After a Prius test drive, I did the hybrid Civic one more time, and the Prius finally won me over. (I was definitely swayed by the "full hybrid" engineering, and definitely the higher EPA MPG values, even though I've not yet hit 60mpg, but do exceed 51mpg.)
     
  4. ray0825

    ray0825 New Member

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    I am so sick of reading article after article from industry 'experts' pontificating about why people buy a Prius. They ALL point out it must be because Prius 'looks different'. Prius owners all want to be smug and rub everyones nose in our intelligence. While there may be people out there like that, I think they are missing the real issue.

    I wanted a 4-5 passenger car that got great mileage. (I drive a lot) There is nothing else out there even close. The reason for this is Toyota pulled out all the stops to engineer a car to do just that (with low emissions - which is nice too). And yes, it looks different because low drag was PART of this.

    All the pundits who point to other cars whose bodies are unchanged and have hybrid drive trains and DONT sell have missed the basic fact that they dont get that much better gas mileage either. Why bother?
     
  5. richard schumacher

    richard schumacher shortbus driver

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    "I'm a hybrid" is not merely about styling, it's about the whole integrated package of design choices which provide better reliability and function along with lower emissions and greater fuel economy. I will never again buy a car with a conventional transmission or a belt-driven A/C compressor, or without an instantaneous fuel economy display or regenerative braking.
     
  6. usbseawolf2000

    usbseawolf2000 HSD PhD

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    To Analysts,

    It is not just the "hey I am a hybrid" statement. It is all about the absolute advantages that HSD offers.

    It means:

    Smooth power delivery
    Instant power response
    Eye-popping MPG
    Cleaner emission
    Fun, quiet and relaxing driving experience
    High-tech features/options
    Superior engineering
    Defies conventional thinking (I love traffic jams now)
    Low maintenance
    High reliability
    Distinctive aerodynamic look

    Giving credit solely to any one item above is just discrediting all others. The other hybrid models that are not as successful (sale) as Prius might be missing a few items from the list.

    Well, that's my opinion.
     
  7. jiepsie

    jiepsie New Member

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    The design of the Prius was one of the things that made me hesitate about buying it, I did not really like the look of it. If there was a hybrid Mini, CVT and all, I'd have bought that instead.
     
  8. Vebev

    Vebev Junior Member

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    <div class='quotetop'>QUOTE(lowlander @ Aug 3 2007, 10:24 AM) [snapback]489972[/snapback]</div>
    Same here. Prius looks weird. I considered buying a Camry but didn't like the higher cost.

    Now that I've had the Prius for a while it's look has grown on me.
     
  9. Earthling

    Earthling New Member

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    Just because a car claims to be a hybrid means nothing to me. MPG's means everything, since that's the point of having hybrids in the first place.

    If it doesn't get outstanding fuel economy, it's not going to find a place in my driveway.

    I didn't buy a Prius because it looks like a hybrid, I bought one because it acts like a hybrid, providing more than adequate room with oustanding fuel economy.

    The only guy that had it right in that article said about the Prius,"You can see from a hundred yards away, it is the only one of the group that can run completely on electric, and it has the best fuel economy out of all of them."

    Yeah, that's why I bought one.

    Harry
     
  10. burritos

    burritos Senior Member

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    <div class='quotetop'>QUOTE(rayj @ Aug 3 2007, 10:34 AM) [snapback]489935[/snapback]</div>
    That's funny. Maybe people buy priuses to show that they have a big brain(when they really have a little one) like people who buy corvettes/trucks/suvs to show that they have a big penis(when they really have a little one).
     
  11. john1701a

    john1701a Prius Guru

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    <div class='quotetop'>QUOTE(rayj @ Aug 3 2007, 10:34 AM) [snapback]489935[/snapback]</div>
    Those very same experts were saying the exact opposite 4 years ago, when the HSD Prius was new.

    They claimed the distinct look was its greatest weakness, that it needed to look like other vehicles on the road to be a success.

    They were dead wrong.

    Old school marketing simply doesn't work anymore. The wants & needs of those in the 21st Century are different... and they still haven't figured that out yet.
     
  12. ny biker

    ny biker Member

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    <div class='quotetop'>QUOTE(Somechic @ Aug 3 2007, 09:55 AM) [snapback]489902[/snapback]</div>
    If anyone out there lives near Lexington, MA or Tustin, CA, please track these guys down and slap them for me.

    I was originally looking into getting the Camry hybrid, which looks just like a regular Camry. When I realized how small the trunk was I got the Prius instead. I don't give a rat's a** what other people think of me when they see my car. I am just tired of paying money to the greedy bastards who run the oil companies.

    If my self-esteem depended on my car, I would never have driven my old Camry for 9 years.
     
  13. Earthling

    Earthling New Member

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    <div class='quotetop'>QUOTE(nybiker @ Aug 3 2007, 01:34 PM) [snapback]490015[/snapback]</div>
    Good point. It's sad how some people have to spend $$$'s on SUV's for self-esteem reasons. That is truly pathetic.

    Harry
     
  14. jweale

    jweale Junior Member

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    It is all about the performance. I'd actually prefer if it did not scream out "hybrid!" - I fear that's just going to get it keyed when I have parked on the street on a night in New York city. Although I do have a weakness for hatchbacks; my last 'practical, 4-seater hatchback' was a well used '88 Porsche 944. Compared to my Triumph Spitfire, it was a practical car... My wife went shopping with me this time, and our Prius was suppose to hit Port last Tues. <_<

    <div class='quotetop'>QUOTE(nybiker @ Aug 3 2007, 01:34 PM) [snapback]490015[/snapback]</div>
    Amateur. My Prius will replace a 15 year old Camry with so many deferred maintenance items (Did you know a beer can clamped around a 1" hole in the exhaust can hold for months of light use? Or that a couple 2x4s and the spare tire jack can get the doors mostly-working after a light t-boning accident?) that 'the greenest car is just keeping your old one' recommendation really is not possible :) .
     
  15. bmwquickspeed

    bmwquickspeed New Member

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    I too am not interested in standing out. I actually test drove a couple of Civic Hybrids and I liked them.

    The only reasons that I was seriously considering a used Civic Hybrid is because it had an optional 5 speed manuel transmission and I prefer the sedan look.

    In the end I purchased a used Prius mainly because all the cool toys. I sat down in the car and felt like I was piloting the car of the future.

    I have come to enjoy the transmission in the Prius but having test driven one of the Civic CVT transmissions I don't think I would have ever been able to get used to it. The reaction time for hard acceleration was nothing like the Prius which is very fast in comparison.

    I personelly feel that the Prius is ugly but it is growing on me and all the cool features and the excellent gas mileage makes me very happy with my decision.
     
  16. Pinto Girl

    Pinto Girl New Member

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    If these guys are so smart, why aren't they retired?

    Seriously, the Prius is a good car and fulfills its function well. It's smart and cheap to operate and makes sense on a lot of levels.

    There's not as much mystery to it, perhaps, as these "consultants" would like us to believe.
     
  17. javajunki

    javajunki recycled hippy

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    <div class='quotetop'>QUOTE(rayj @ Aug 3 2007, 08:34 AM) [snapback]489935[/snapback]</div>

    The Prius is our first new car. I do really like that it looks different, "I" am different. I didn't get it
    to be able to be smug.. that just happened..driving along thinking I can get to work and back on
    the gas that driver used gunning his SUV up over the bridge.. *snicker snicker*
     
  18. Tech_Guy

    Tech_Guy Class Clown

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    All the reasons stated above for buying a Prius are indeed very noble...

    But at a gut level, I like the concept of limiting our energy <strike>dependence </strike> addiction on the Middle East.

    Keith :unsure:
     
  19. donee

    donee New Member

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    Hi All,

    The Prius design was not a result of marketing input. It was design for function. The battery had to go somewhere, and putting it half under, and half behind the rear seat resulted in a taller seat postions. Which meant to get the car under the air-drag of the drive train design, the aerodrag had to be really shaved. With no way to reduce frontal area, the raked front hood line, and divots in the roof were needed. The long tail then resulted in the long rear leg-room. A basic synergy was had.

    All this really does is point out how Total Quality Managment can be so poor at delivering a product that is the best solution for the customers. Customers are not technical or design experts. If they were, they would not need the car company, they would just make their own. So, the marketers take it too far by assuming all the imaginable solutions are available to the customer imagination. And force design directions down the technical staff.

    When it occured to me that the car was such a design masterpiece, I was really sold on the car.
     
  20. Prudence

    Prudence New Member

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    <div class='quotetop'>QUOTE(bmwquickspeed @ Aug 3 2007, 05:09 PM) [snapback]490151[/snapback]</div>
    I wanted a Prius three years ago, but my husband said it's design was so "uninspired". That remark was aimed as the exterior, not knowing anything about the insides of it. Now that we have it, I can't tell you how many times I have said, "yeah, it's not so bad for an uninspired car, is it?" I don't care about the looks, it looks similar to the Matrix and some other cars out there now. I had read up on hybrid technology and decided three years ago the Toyota technology was better than Honda's was, that's why I was interested in the Prius from the start.
    I would just as soon not have the Hybrid badges, but not enough to take them off.