July 17, 2007

Consumer interest in hybrids drops as diesels gain favour – J.D. Power

Westlake Village, California – The percentage of new-vehicle shoppers considering hybrid vehicles is dropping as consumers become more realistic about their fuel-efficiency capabilities, while interest in diesels is increasing, according to the J.D. Power and Associates 2007 Alternative Powertrain Study.

Now in its second year, the study examines the reasons why consumers consider or avoid alternative powertrain vehicles. The 2007 report found that 50 per cent of new-vehicle shoppers are considering a hybrid, down from 57 per cent in the 2006 study. While a general decline can be observed across all age groups, the largest drop is in younger vehicle shoppers aged 16 to 25 years old; 60 per cent are considering a hybrid in 2007, down from 73 per cent in 2006. The average additional price that consumers are willing to pay for a hybrid powertrain is US$2,396, with the expectation of receiving an improvement of 18.5 mpg (12.7 L/100 km) over a traditional vehicle of similar size.

“In the 2006 study, we found consumers often overestimated the fuel efficiency of hybrid-electric vehicles, and the decrease in consideration of hybrids in 2007 may be a result of their more realistic understanding of the actual fuel economy capabilities,” says Mike Marshall, director of automotive emerging technologies. “While hybrid sales are steadily increasing, they continue to face competition for market share against an increasing offering of other alternative powertrains and fuels options.”

The study also found that consumer consideration for purchasing clean diesel vehicles, which were introduced to the U.S. market in 2007, is at 23 per cent. In 2006, only 12 per cent of shoppers considered purchasing diesel vehicles. On average, consumers are willing to pay an additional US$1,491 for the clean diesel option, and expect an average additional fuel economy of 15 mpg (15.6 L/100 km).

“As the automotive industry steadily offers more alternative powertrain/fuel options to consumers, buyer preferences will continue to shift the market in the coming years,” Marshall says. “With high fuel prices, perceived dependency on foreign oil and an increased focus on environmental issues all being top of mind among consumers, manufacturers will not only have to continuously make efforts to produce more fuel-efficient vehicles, but also to diversify the range of options.”

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