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Lack of Production Hurting U.S. Hybrid-Makers
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The recent rise in gas prices has intensified already high demand for hybrid gas-electric vehicles. American carmakers have been widely marketing their hybrid offerings—almost exclusively SUVs—through major print and television advertising, including Super Bowl spots. Yet, Japanese car companies continue to own more than 90 percent of the hybrid market. Yesterday’s report from National Public Radio’s Elizabeth Shogren explains why. Ford and General Motors aren’t producing nearly enough hybrids to meet demand.
The NPR report focused on the exorbitant markups that some dealers are charging for Ford Escape Hybrids. It’s not uncommon for dealers to charge a premium of $4,000 to $5,000 on an Escape Hybrid, while simultaneously offering thousands of dollars of discounts on the gas-only version of the vehicle. “Dealers across the country are jacking up the price of Escapes and other hybrid SUVS, the same way they put premiums on fancy sports cars,” reported Shogren. “Would-be hybrid buyers also tell stories of waiting months for cars they’ve ordered and giving up in frustration.”
Christian Fackrell, a manager at Jerry’s Ford in Annandale, Va., was interviewed for the story. He said, “If there was an abundance of them, I’m sure they would sell like hotcakes.” Said Deep, a Ford spokesman, told NPR that the company has no plans to increase production. Meanwhile, Nikkei News recently reported that Toyota Motor Corporation plans to increase the number of Priuses it builds by 60 percent for 2009. This translates to 450,000 vehicles, up from last year’s production number of 280,000. Ford builds approximately 20,000 Escape Hybrids every year.
Production and sales of hybrids from General Motors are even lower. The combined sales of the Saturn Vue Green Line and Saturn Aura Green Line by General Motors are commonly fewer than 30 units per month. GM’s Chevrolet division has not released sales numbers for the Chevy Tahoe hybrid since its introduction in late 2007. According to the NPR report, and stories that HybridCars.com has been tracking since last year, very few Saturn dealerships have any hybrids.
Michael Morrissey, a Saturn spokesman, pointed to lack of battery production. “That’s one of the growing pains of new technology,” he said. “There’s only so much manufacturing capacity of hybrid batteries in the world.” Lack of domestic hybrid battery production casts doubt on the U.S. companies’ ability to ramp up production to meet demand for hybrids that is expected to rise in coming years.
The lack of planning and/or commitment to produce more hybrids will not stop Ford’s and GM’s advertising campaigns. Mark Klausen (sp?), Chevrolet spokesperson, told NPR, “The fact that we’ve got such PR for the vehicle has lifted the image of the entire company.” But he admits that you won’t find Chevrolet Tahoe hybrids in most dealership regardless of the premium you might be willing to pay.