Toyota's love for hybrids isn't shared by Big Three

Toyota expects to sell 600,000 hybrid cars in the U.S., but rival automakers are more cautious about the technology.

August 06, 2005|By Rick Popely | Rick Popely,CHICAGO TRIBUNE

TRAVERSE CITY, Mich. - Toyota's bold prediction that it would sell 600,000 hybrid vehicles annually in the United States by early next decade has been met with a collective "We'll see how it goes" from the rest of the industry.

In a forum on future engines at an industry conference here yesterday, the Big Three domestic automakers and Honda took the road of caution.

Honda and Ford sell hybrids now and the others plan to roll out gas/electric models over the next few years, but none would venture a sales projection.

Ford, which produces two hybrid SUVs, says it will add three models by 2008, giving it five, and will have its second generation of the technology on the road by then.

"That won't be our last [hybrid model]," said Mary Ann Wright, director of Ford's fuel-cell program. "But we're not in a race with Toyota."

Even Honda, the first to offer a hybrid in the United States with the 2000 Insight, has not projected beyond the 50,000 hybrids it expects to sell this year because of uncertainty over demand.

"We have to see what the market is, so we really take it one step at a time," said John German, American Honda's manager of environmental and energy analyses.

Besides the Insight, Honda has hybrid versions of the Accord and Civic but hasn't announced others. "We literally haven't made up our minds about what our next hybrid will be," German said.

What does Toyota see that the others don't?

For one thing, it has received a public edict from the top. Toyota Motor Corp. President Katsuaki Watanabe recently set a goal of selling 1 million hybrids globally by early next decade, with 600,000 sold in the United States, its largest market.

Hybrid vehicles are powered by gasoline and electric motors, switching between the two to improve mileage and reduce emissions.

Toyota said Wednesday that it will introduce 10 hybrids over the next six or seven years. "We'll be in all segments" to reach the 600,000-vehicle goal, about 25 percent of Toyota's expected sales volume, said David W. Hermance, Toyota's executive environmental engineer.

J.D. Power and Associates, a marketing company with long ties with the auto industry, is not so sure. The research organization sees hybrid sales industrywide leveling off at about 650,000 vehicles per year by 2012.

Anthony Pratt, J.D. Power's senior manager of global power-train research, says that's because the gas/electrics cost about $2,300 to $11,000 more than gasoline-powered cars. Moreover, the Big Three and Honda are exploring more efficient gas engines, diesels and even natural-gas vehicles that will be alternatives by 2012.

But costs are dipping as Toyota gains experience with the technology, said Hermance. He also says the electric motors, software and batteries it develops for hybrids can be used in hydrogen fuel-cell vehicles, which many experts believe are the cars of the future.

Ford has said it will limit sales of its hybrid models to about 20,000 this year, partly because it can't get more batteries and other components. Hermance says that is not an issue for Toyota, which develops the hardware and software in-house and gets its batteries from a joint venture with Panasonic.

Though the other manufacturers are cautious about hybrids, they aren't blind to their possibilities. They are designing vehicles so they can easily add the necessary hardware, particularly the bulky battery packs, if demand warrants.

Ford, for example, had to sacrifice some luggage space in converting the Escape sport-utility to a hybrid, and the Honda Accord Hybrid gave up its spare tire. The automakers, including General Motors and DaimlerChrysler AG, don't want such tradeoffs.

Wright, the Ford executive, said the automaker's future cars would be better able to integrate hybrid systems.

GM will introduce versions of the Saturn Vue SUV and Chevrolet Malibu sedan with limited hybrid systems over the next two years and full hybrid versions of the Chevrolet Tahoe and GMC Yukon in late 2007. The Chrysler Group is collaborating with GM and will use its system in the Dodge Durango in 2008.

GM and Chrysler say they are putting full hybrid systems on vehicles where they save the most fuel.

Pratt, of J.D. Power and Associates, says it's hard to predict whether buyers will pay the extra cost of a large SUV, a vehicle most buyers choose because of hauling or towing capability.

The Chicago Tribune is a Tribune Publishing newspaper.

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