Automakers Battling In Environmental Image Game - WSJ

[Klaus]

Automakers Battling In Environmental Image Game

By SHARON SILKE CARTY
April 16, 2004 10:20 a.m.
DOW JONES NEWSWIRES

DETROIT -- Bob Lutz knows something about hybrid drivers: They listen to National Public Radio.

Lutz thinks he knows something else about hybrid drivers: They are wasting their time if they believe they are saving the environment with their cars.

"There's been a tidal wave of hybrid interest," Lutz, chairman of North America for General Motors Corp. (GM), said in a recent interview at the New York Auto Show. "People are going to figure out that saving a little bit of fuel isn't going to make a bit of difference."

Leading product development at GM is Lutz, a man who once said the answer to "What would Jesus drive?" is "A Hummer" (because it can carry all the apostles and easily travel across the desert). Hummers get, on average, about 12 miles to the gallon.

His public comments on the environment haven't made him the most popular auto executive among the environmental (and likely NPR-listening) crowd. But a few miles away, in Dearborn, the head of Ford Motor Co. (F) has yet to win many points for his environmental stance, even though he has publicly embraced hybrids.

Chief Executive Bill Ford is attempting to change the Ford image from a maker of gas-guzzling sport utility vehicles to one that makes clean vehicles that people want to drive. The company has its first full hybrid coming to market this summer with the Ford Escape hybrid. Ford said it wanted to make a hybrid in one of its more popular vehicles, so buyers wouldn't have to compromise their lifestyles to save fuel.

Ford has come under fire for backing off a promise to reduce fuel consumption of its SUVs by 25% in five years. Kristin Kinley, a spokeswoman for Ford, said the company is "being very competitive in terms of investing in environmental issues."

Both Ford and GM have been losing the environmental image battle to Toyota Motor Corp. (TM) and Honda Motor Co. (HMC), which scored wins early on by offering smaller, more fuel-efficient cars than their competitors. Both Japanese automakers have hybrid gas and electric cars on the market, with Toyota's Prius leading the popularity polls.

"They're losing market share and hemorrhaging sales, particularly to Toyota and Honda, and not understanding that they need to start focusing on better gas mileage," Brendan Bell, a spokesman with the Sierra Club, said of Ford and GM.

But whether any of the four automakers deserves a better environmental image than the other is up for debate. GM has a series of mild hybrids coming to market in the next several years, although its first full gas and electric hybrid system won't make it to the market until 2007. But the company points to data culled by the Environmental Protection Agency, which show that six of the top 10 most fuel-efficient family cars are GM products. Critics say Toyota and Honda are starting to produce larger vehicles and are leaving their fuel-efficient heritages in the dust.

Lutz admits the automaker may have made a miscalculation when it came to the development of hybrids. GM said in November it was backing off from introducing the full hybrid 2006 Saturn Vue, but will be offering mild hybrids - ones that work intermittently rather than engaging the engine at slow speeds like full hybrids - as soon as this summer.

"We have a time lag on Toyota, which is unfortunate," Lutz said. "We business-cased it. We thought, this isn't worth it - it's not going anywhere. I think what's surprised us is that it has gone somewhere."

Consumer data show that overall fuel economy isn't among buyers' top concerns. Statistics compiled by CNW Marketing Research show that 23.7% of buyers listed fuel economy as extremely or somewhat important when considering a new car. That is well below low monthly payments, which 90.4% of the consumers said was important. It even ranked below having cast alloy or special wheels, which 34.7% of consumers said was important.

"It tends to be something that, much like 'Buy American,' it's a nice thing to say, but when it comes down to price and the goods comes from China, that's the one that gets bought," said Art Spinella, an analyst with CNW Marketing.

Most people don't really care if their car is a hybrid or all that fuel efficient, said Brian Moody, a road-test editor for Edmunds.com. Drivers want cars that handle well, that have enough roominess and power to carry their families and all of their stuff, and look good. Fuel economy is secondary - maybe even tertiary - to all that.

"People will do it if they can, but nobody's going to sacrifice," he said.

Bell, of the Sierra Club, said part of the problem is that the automakers haven't offered many options for people who want fuel-efficient cars, but who may also want an SUV. With existing technology, Bell said he thinks the automakers could put better transmissions and more efficient engines into trucks already on the road and boost fuel efficiency by 20 miles per gallon.

Chris Preuss, a spokesman for GM, said the company has more in its pipeline regarding fuel efficiency than all the other automakers. GM already has hybrid buses on the road, he noted.

"I would not agree with anyone who says that GM has had a poor attitude or has not responded strongly to the market," he said.

[Klaus]

Automakers Battling In Environmental Image Game

By SHARON SILKE CARTY
April 16, 2004 10:20 a.m.
DOW JONES NEWSWIRES

DETROIT -- Bob Lutz knows something about hybrid drivers: They listen to National Public Radio.

Lutz thinks he knows something else about hybrid drivers: They are wasting their time if they believe they are saving the environment with their cars.

"There's been a tidal wave of hybrid interest," Lutz, chairman of North America for General Motors Corp. (GM), said in a recent interview at the New York Auto Show. "People are going to figure out that saving a little bit of fuel isn't going to make a bit of difference."

Leading product development at GM is Lutz, a man who once said the answer to "What would Jesus drive?" is "A Hummer" (because it can carry all the apostles and easily travel across the desert). Hummers get, on average, about 12 miles to the gallon.

His public comments on the environment haven't made him the most popular auto executive among the environmental (and likely NPR-listening) crowd. But a few miles away, in Dearborn, the head of Ford Motor Co. (F) has yet to win many points for his environmental stance, even though he has publicly embraced hybrids.

Chief Executive Bill Ford is attempting to change the Ford image from a maker of gas-guzzling sport utility vehicles to one that makes clean vehicles that people want to drive. The company has its first full hybrid coming to market this summer with the Ford Escape hybrid. Ford said it wanted to make a hybrid in one of its more popular vehicles, so buyers wouldn't have to compromise their lifestyles to save fuel.

Ford has come under fire for backing off a promise to reduce fuel consumption of its SUVs by 25% in five years. Kristin Kinley, a spokeswoman for Ford, said the company is "being very competitive in terms of investing in environmental issues."

Both Ford and GM have been losing the environmental image battle to Toyota Motor Corp. (TM) and Honda Motor Co. (HMC), which scored wins early on by offering smaller, more fuel-efficient cars than their competitors. Both Japanese automakers have hybrid gas and electric cars on the market, with Toyota's Prius leading the popularity polls.

"They're losing market share and hemorrhaging sales, particularly to Toyota and Honda, and not understanding that they need to start focusing on better gas mileage," Brendan Bell, a spokesman with the Sierra Club, said of Ford and GM.

But whether any of the four automakers deserves a better environmental image than the other is up for debate. GM has a series of mild hybrids coming to market in the next several years, although its first full gas and electric hybrid system won't make it to the market until 2007. But the company points to data culled by the Environmental Protection Agency, which show that six of the top 10 most fuel-efficient family cars are GM products. Critics say Toyota and Honda are starting to produce larger vehicles and are leaving their fuel-efficient heritages in the dust.

Lutz admits the automaker may have made a miscalculation when it came to the development of hybrids. GM said in November it was backing off from introducing the full hybrid 2006 Saturn Vue, but will be offering mild hybrids - ones that work intermittently rather than engaging the engine at slow speeds like full hybrids - as soon as this summer.

"We have a time lag on Toyota, which is unfortunate," Lutz said. "We business-cased it. We thought, this isn't worth it - it's not going anywhere. I think what's surprised us is that it has gone somewhere."

Consumer data show that overall fuel economy isn't among buyers' top concerns. Statistics compiled by CNW Marketing Research show that 23.7% of buyers listed fuel economy as extremely or somewhat important when considering a new car. That is well below low monthly payments, which 90.4% of the consumers said was important. It even ranked below having cast alloy or special wheels, which 34.7% of consumers said was important.

"It tends to be something that, much like 'Buy American,' it's a nice thing to say, but when it comes down to price and the goods comes from China, that's the one that gets bought," said Art Spinella, an analyst with CNW Marketing.

Most people don't really care if their car is a hybrid or all that fuel efficient, said Brian Moody, a road-test editor for Edmunds.com. Drivers want cars that handle well, that have enough roominess and power to carry their families and all of their stuff, and look good. Fuel economy is secondary - maybe even tertiary - to all that.

"People will do it if they can, but nobody's going to sacrifice," he said.

Bell, of the Sierra Club, said part of the problem is that the automakers haven't offered many options for people who want fuel-efficient cars, but who may also want an SUV. With existing technology, Bell said he thinks the automakers could put better transmissions and more efficient engines into trucks already on the road and boost fuel efficiency by 20 miles per gallon.

Chris Preuss, a spokesman for GM, said the company has more in its pipeline regarding fuel efficiency than all the other automakers. GM already has hybrid buses on the road, he noted.

"I would not agree with anyone who says that GM has had a poor attitude or has not responded strongly to the market," he said.

[Klaus]

Automakers Battling In Environmental Image Game

By SHARON SILKE CARTY
April 16, 2004 10:20 a.m.
DOW JONES NEWSWIRES

DETROIT -- Bob Lutz knows something about hybrid drivers: They listen to National Public Radio.

Lutz thinks he knows something else about hybrid drivers: They are wasting their time if they believe they are saving the environment with their cars.

"There's been a tidal wave of hybrid interest," Lutz, chairman of North America for General Motors Corp. (GM), said in a recent interview at the New York Auto Show. "People are going to figure out that saving a little bit of fuel isn't going to make a bit of difference."

Leading product development at GM is Lutz, a man who once said the answer to "What would Jesus drive?" is "A Hummer" (because it can carry all the apostles and easily travel across the desert). Hummers get, on average, about 12 miles to the gallon.

His public comments on the environment haven't made him the most popular auto executive among the environmental (and likely NPR-listening) crowd. But a few miles away, in Dearborn, the head of Ford Motor Co. (F) has yet to win many points for his environmental stance, even though he has publicly embraced hybrids.

Chief Executive Bill Ford is attempting to change the Ford image from a maker of gas-guzzling sport utility vehicles to one that makes clean vehicles that people want to drive. The company has its first full hybrid coming to market this summer with the Ford Escape hybrid. Ford said it wanted to make a hybrid in one of its more popular vehicles, so buyers wouldn't have to compromise their lifestyles to save fuel.

Ford has come under fire for backing off a promise to reduce fuel consumption of its SUVs by 25% in five years. Kristin Kinley, a spokeswoman for Ford, said the company is "being very competitive in terms of investing in environmental issues."

Both Ford and GM have been losing the environmental image battle to Toyota Motor Corp. (TM) and Honda Motor Co. (HMC), which scored wins early on by offering smaller, more fuel-efficient cars than their competitors. Both Japanese automakers have hybrid gas and electric cars on the market, with Toyota's Prius leading the popularity polls.

"They're losing market share and hemorrhaging sales, particularly to Toyota and Honda, and not understanding that they need to start focusing on better gas mileage," Brendan Bell, a spokesman with the Sierra Club, said of Ford and GM.

But whether any of the four automakers deserves a better environmental image than the other is up for debate. GM has a series of mild hybrids coming to market in the next several years, although its first full gas and electric hybrid system won't make it to the market until 2007. But the company points to data culled by the Environmental Protection Agency, which show that six of the top 10 most fuel-efficient family cars are GM products. Critics say Toyota and Honda are starting to produce larger vehicles and are leaving their fuel-efficient heritages in the dust.

Lutz admits the automaker may have made a miscalculation when it came to the development of hybrids. GM said in November it was backing off from introducing the full hybrid 2006 Saturn Vue, but will be offering mild hybrids - ones that work intermittently rather than engaging the engine at slow speeds like full hybrids - as soon as this summer.

"We have a time lag on Toyota, which is unfortunate," Lutz said. "We business-cased it. We thought, this isn't worth it - it's not going anywhere. I think what's surprised us is that it has gone somewhere."

Consumer data show that overall fuel economy isn't among buyers' top concerns. Statistics compiled by CNW Marketing Research show that 23.7% of buyers listed fuel economy as extremely or somewhat important when considering a new car. That is well below low monthly payments, which 90.4% of the consumers said was important. It even ranked below having cast alloy or special wheels, which 34.7% of consumers said was important.

"It tends to be something that, much like 'Buy American,' it's a nice thing to say, but when it comes down to price and the goods comes from China, that's the one that gets bought," said Art Spinella, an analyst with CNW Marketing.

Most people don't really care if their car is a hybrid or all that fuel efficient, said Brian Moody, a road-test editor for Edmunds.com. Drivers want cars that handle well, that have enough roominess and power to carry their families and all of their stuff, and look good. Fuel economy is secondary - maybe even tertiary - to all that.

"People will do it if they can, but nobody's going to sacrifice," he said.

Bell, of the Sierra Club, said part of the problem is that the automakers haven't offered many options for people who want fuel-efficient cars, but who may also want an SUV. With existing technology, Bell said he thinks the automakers could put better transmissions and more efficient engines into trucks already on the road and boost fuel efficiency by 20 miles per gallon.

Chris Preuss, a spokesman for GM, said the company has more in its pipeline regarding fuel efficiency than all the other automakers. GM already has hybrid buses on the road, he noted.

"I would not agree with anyone who says that GM has had a poor attitude or has not responded strongly to the market," he said.