Green Cars - developing and marketing environmentally-friendly vehicles

American Demographics, Jan, 2001 by Dale Buss

The "cascadees," says J.D. Power's Malesh, will include Boomers, "who once were like these kids are now." They're the people who are now voting for more taxes for schools, for example. "They want to do the right thing." To that end, Ford has recently purchased Th!nk Mobility LLC, a Carlsbad, California-based company that sells electric bikes and small "neighborhood" cars. Th!nk "will appeal to the people out there who really want to do the right thing for the environment," says Rob Stevens, the company's president.

THE PRAGMATISTS: For green cars to appeal to the broader marketplace, including older consumers, they're going to have to offer something besides do-goodism to the more pragmatic among us. "Vehicles whose virtue is simply that they're powered by hybrids may not be able to provide American consumers with the same sort of emotional satisfaction that regular vehicles do," Cedergren insists. Geralyn Yoza, Prius product manager for Torrance, California-based Toyota Motor Sales USA, says that with the Prius, the company "realized that consumers don't want to compromise performance, convenience, or comfort." So, whereas Honda's Insight is a radically designed two-seater, Prius is a five-seater family car with a design more akin to the compact Toyota Corolla.

Linda Watson, management supervisor for Oasis, the New York City-based agency that crafted strategic marketing for Prius, adds that Toyota understood "people would say, `Isn't that great they're doing this car.' But what we didn't want them to say is, `I sure hope my neighbor buys one.' Consumers are willing to embrace technology as long as it doesn't require a compromise on their part."

Indeed, more than 50 percent of those surveyed in our QuickTake survey cited unproven technology, and concerns about difficulties servicing the cars as reasons not to buy an environmentally-friendly automobile. Cedergren says the answer to such concerns may be for the Big Three to make hybrids more like popular, larger vehicles, offering a hybrid powertrain as an option just as they do air conditioning. Big Three executives believe these types of hybrids will have much more of a market impact than the Japanese small-car pioneers. And by targeting trucks and SUVs for hybrid treatment, the American companies are applying the technology "where they can really offset fuel consumption," says GM's Stewart.

THE GASOLINE-PRICE WILD CARD: Some experts say that the only way a mainstream market for green vehicles will materialize is with a pronounced and prolonged rise in fuel prices. In an earlier Greenfield Online survey, completed just after last summer's upward spiral in gas prices, saving money on gas was the leading reason given for interest in electric or hybrid vehicles - cited by 83 percent of the 2,000 respondents surveyed. Two out of three people considered fuel efficiency to be very important when shopping for a vehicle. Some experts believe, however, that consumers won't be motivated by the green cars' fuel efficiency unless they are faced with outright gasoline shortages, such as those in the '70s. "Most people spend $1,000 to $1,500 a year per vehicle for fuel, and if you cut it in half you save maybe $500 to $1,000," says AutoPacific's Hossack, whose company surveyed 28,000 people earlier this year about such price-elasticity questions. "But people aren't going to be willing to spend $5,000 more on a hybrid to save $1,000 in fuel and have lower emissions."