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From the Detroit Insider:

Are hybrid sales running out of gas?

Smallest models are still hot, but some larger ones languish on the lot.

Brett Clanton / The Detroit News

NEW YORK -- Hot or not? When it comes to fuel-saving hybrid vehicles, you can argue either side.

But a top Honda official on Thursday gave naysayers a little more reason to doubt that hybrids are part of the long-term solution to kicking America's gas habit.

Honda may cut production of its Accord Hybrid after seeing weaker-than-expected sales in its first four months on the market, said Dick Colliver, executive vice president of Honda Motor Co.'s U.S. sales arm.

"We've had to reevaluate our position," said Colliver. "It's having a hard time in the market."

Other automakers such as Ford Motor Co. and Toyota Motor Corp. also are seeing sales stall for some of their hybrid models -- a trend that has spurred questions about the long-term acceptance of vehicles powered by both gas engines and electric batteries.

"It's definitely a warning signal," said Guido Vildoso, industry analyst with Global Insight in Lexington, Mass.

But with vehicles such as the Toyota Prius continuing to flourish, most manufacturers remain convinced there is a larger market for hybrid vehicles, even if they prove to be one of several alternatives to traditional gasoline-powered engines.

It's just of matter of figuring out where the sweet spot of the hybrid market is, they say.

Analyst sees market growing

In a new Harris Interactive poll, one quarter of prospective car buyers would consider a hybrid, and other polls put the figure even higher. Hybrids now account for 1 percent of all light vehicle sales, but J.D. Power and Associates sees the figure climbing to 4 percent by 2012.

In the next couple of years, a raft of automakers will take their best stab at cracking the code by introducing hybrid vehicles to suit every price range and taste.

Later this year, General Motors Corp. will fish for bargain-hunting greenies with a hybrid version of its Saturn VUE sport utility that starts under $23,000.

Ford has pledged to offer hybrid versions of half of its models by the end of decade.

At the other end of the spectrum, Toyota's Lexus brand will test the waters with a have-your-cake-and-eat-it-too hybrid that offers the performance of a rocket-like 12-cylinder engine with the fuel economy of a V8.

Lexus introduced the 2008 LS 600h L sedan on Wednesday at the New York International Auto Show. After the presentation, company officials defended the luxury hybrid, which will get a combined 22 miles per gallon, in the face of criticism that it is an irresponsible use of technology intended to conserve fuel, not boost horsepower.

"In the luxury segment, if we just focused on fuel economy, that wouldn't be enough," said Bob Carter, Lexus division group vice president and general manager.

Customers: Mixed feelings

Hybrid vehicles, which combine gas and electric engines to achieve better gas mileage, burst onto the scene six years ago. They were heralded as a way to curb America's appetite for foreign oil and to reduce smog-forming emissions. Along the way, they earned the blessing of eco-friendly Hollywood stars and rode a wave of hype that tended to gloss over their shortcomings -- and that cast Detroit automakers as laggards for not jumping on board sooner.

But some consumers have complained that the money they save in gas from driving a hybrid is not enough to offset the premium they paid when buying a hybrid. Or that they don't get the fuel economy numbers that were advertised.

Such complaints have spurred some automakers, even those with hybrids on the way, to temper their expectations about the vehicles and their place in the U.S. auto market.

"Even though hybrids are a solution, they're not thesolution," Carlos Ghosn, chairman and CEO of Nissan Motor Co., said in a speech Wednesday in New York.

He later reminded reporters that he has warned hybrids could have limited appeal.

"At least admit I was the only guy saying, 'Watch out, the consumer decides, don't be excited about it,' " Ghosn said. "I have some kind of satisfaction of being a little bit right on this one."

He said he sees promise in alternative fuels, including corn-based ethanol, diesels and hydrogen. "I'm not a one-solution guy."

Toyota plans more hybrids

But Toyota, which has aggressive plans to offer hybrids across its entire lineup, disputes the idea that hybrids are a temporary or "bridge" solution to something better.

"That's some of my competitors' spin," said David Hermance, an executive engineer at Toyota who oversees hybrid programs.

Honda officials also say they do not see the bloom fading from the hybrid market, despite the possibility that it may pare output of its Accord Hybrid. They point to the success of its gas-electric Civic sedan.

But they say the lesson of the Accord -- pitched as a high-performance flagship with a V6 that boasts better horsepower than its top-of-the-line Accord -- is that hybrid buyers are more interested in fuel economy than vroom.

David Cole, head of the Center for Automove Studies, said the hybrid market is showing some softness while entering a new phase.

As models are added and the number of hybrids on the market grows beyond demand from so-called "early adopters" and environmentalists, more mainstream consumers are having a tough time justifying the increased cost, despite rising fuel prices.

Carmakers, Cole said, may need to target reluctant consumers with discounts and low financing.

Buyers may also be passing on hybrids like the Accord and Ford Escape -- which last week began offering zero-percent financing for five years to stoke tepid sales -- because they look too much like their mainstream counterparts.

"What hybrid owners want is to stand out," said Jeff Schuster, executive director of J.D. Power Automotive Forecasting.

That may help explain the success of the Toyota Prius, a vehicle whose unique design announces it is a green machine, and why manufacturers have started adding design cues to differentiate their hybrids from their gas-powered counterparts.

Honda's Colliver did not say when a decision would be made whether to cut Accord Hybrid production. But any reduction is likely to have little impact, he said, since the hybrid model represents such a small portion of Accord's 400,000-plus annual U.S. sales.

He also did not rule out ending production soon of the Honda Insight, the first hybrid introduced to the U.S. market in 1999. "Anything's possible," he said.

The quirky two-seater, which gets 70 miles per gallon and is made of aluminum, embodied the hybrid movement at its outset. It boasted mind-blowing fuel economy in a package only a geek could love.

But today, it's getting harder to tell hybrids from other cars on the road. Is that a good development? It depends on whom you ask.

Vehicle Days on Lot
Honda Accord 90
Ford Escape 61
Toyota Highlander 34
Lexus RX400H 34
 

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moparman said:
But a top Honda official on Thursday gave naysayers a little more reason to doubt that hybrids are part of the long-term solution to kicking America's gas habit.
Ask this question: Why would anyone think that Hybrids are part of the long-term solution to kicking America's gas habit? Hello, Hybrids still use gas. Maybe Hybrids are our way of "weening" us off gasoline, but definately not the solution. Alternative fuel sources are the solution. Kicking the habit would imply to not use whatever that habit is.

Don't get me wrong, I'm critizing the statement, not the hybrid technology. Do I think hybrids are a step in the right direction? I sure do, but make no mistake, whether a car gets 25 MPG or 80 MPG, its still using gallons of something, and until there's something else to burn, its still using gasoline. Hybrids will slow the inevitable, the eventual end to fossil fuels. Maybe its a long way off, maybe its only 5 years away, who really knows. What we do know is it isn't gonna last forever and the pollution produced is taking its toll. Its time to stop kidding ourselves, the time for alternatives is here.
 

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Them what wanted to exchange 'smog' for 'smug' (thank you South Park!) have done so. The rest of us are waiting patiently for Something Really Good.
 
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