GM barges in late to hybrid party
Christine Tierney / The Detroit News
detnews.com
2007 Saturn Vue Green Line Hybrid
After dismissing hybrid cars as a fad, General Motors Corp. is diving into the fast-growing business with plans to offer gas-electric vehicles for every taste and budget.
At the North American International Auto Show, GM will unveil two gas-electric sport utility vehicles, the Saturn Vue Green Line, which will retail for less than $23,000, making it the lowest-priced hybrid SUV on the market, and a Chevy Tahoe with a more sophisticated system that GM is developing with DaimlerChrysler AG and BMW AG.
When the Vue goes on sale in the summer, "people will be very surprised at the kind of price you get in a hybrid and that it will deliver very pleasing performance and 20 percent (better) fuel economy," GM Chairman and CEO Rick Wagoner told The Detroit News.
GM plans to become a leading player, alongside Japan's front-runners and rival Ford Motor Co., by offering 12 hybrids -- including a Cadillac Escalade coming out next year -- in its lineup within four years. That's in addition to gas-electric buses it sells to city fleets.
"I'm going after the highest-consuming vehicles first, because that's where the big payback is," said Tom Stephens, GM group vice president in charge of powertrain.
GM's commitment to hybrids comes as industry experts predict that demand for gas-electric vehicles will surge even though they cost thousands more than similar cars powered only by gas engines.
Online auto research site Edmunds.com estimates hybrids could double their market share this year from 1.2 percent in 2005, and consulting firm J.D. Power and Associates forecasts a 4 percent share for the segment by 2012.
Toyota Motor Corp. leads the pack, accounting for more than half of the estimated 200,000 U.S. hybrid sales in 2005.
But just about every automaker is scrambling now to get a piece of the business. Ford Motor Co., the first U.S. automaker to market a hybrid, the gas-electric Escape SUV, recently launched the Mercury Mariner and plans to sell 250,000 hybrids a year by 2010. Even skeptics like Nissan Motor Co. are working on hybrids.
When Honda Motor Co. introduced gas-electric cars to the U.S. market with the 1999 launch of the Insight, and Toyota followed with the Prius, executives at GM and other automakers scoffed that the business couldn't be profitable. European carmakers pitched fuel-efficient diesels as a better, time-tested alternative.
But with customers lining up to buy hybrids faster than Toyota and Honda could roll them out, GM revised its strategy in 2003. Previously, it had focused on developing ultra-clean fuel-cell cars -- and that still remains its long-term vision.
Consumers, however, were giving GM poor marks for fuel efficiency despite its efforts to improve fuel economy by building six-speed automatic transmissions and engines whose cylinders automatically deactivate when maximum power isn't needed.
GM's first "mild" hybrids launched in 2004 did little to burnish its green credentials. The Chevrolet Silverado and GMC Sierra pickups' electric motors powered the vehicles mostly when they were idle, raising fuel efficiency by only about 10 percent.
"As far as impact on sales of Chevy trucks, there was very little," said Jesse Toprak, director of pricing and market analysis at Edmunds.com. "A 10 percent increase in fuel efficiency isn't going to make people rush into these vehicles."
By contrast, Toyota's full hybrids are a third more fuel-efficient than similar cars, even though some consumers complain that they don't achieve the mileage calculated in the EPA ratings.
Toyota also has the upper hand on pricing, with its hybrids selling at sticker or more, while Honda and Ford discount some hybrids.
The hybrid Vue, retailing for about $2,000 more than a conventional Vue, features a new system that yields twice the fuel savings of GM's "mild" hybrids without jacking up the cost.
The hybrid Vue is available only in front-wheel drive, while its engine and transmission have undergone just minor modifications. By contrast, Ford's $27,515 Escape hybrid and the gas-electric $33,570 Toyota Highlander are fitted with new transmissions.
The system in the Vue also will appear in the Chevrolet Malibu sedan coming out in 2008.
With the next hybrid system, GM hopes to vault to the technological forefront by delivering 25 percent more fuel efficiency and a better performance at high speeds.
The so-called "two-mode" system it is developing with its German partners features two electric motors, one geared to add power at low speeds and another at higher speeds. "That's why DaimlerChrysler and BMW are working with us," said Pete Savagian, engineering director of powertrain in Troy.
"They saw the benefits of two-mode hybrid application for extended high-speed driving," Savagian said. "Some of the systems they looked at were incapable of running out at those speeds and still get any fuel economy."
The three partners will not only share the development costs but also know-how. GM brings experience acquired from its now-defunct electric car program of the 1990s and hybrid bus program, while the German luxury carmakers lend the technology cachet.
"Mercedes-Benz and BMW are associated with quality engines, so it was a smart thing to do," said Toprak, the Edmunds analyst.
Toyota counters that it's hard to compare existing systems with press releases. While GM is touting 25 percent additional fuel economy for its two-mode hybrids, the Toyota Highlander and Lexus RX 400h are 33 percent more fuel-efficient than the nonhybrid versions, says Dave Hermance, Toyota's executive engineer for advanced technology.
"It's a public relations war," said George Peterson, president of Tustin, Calif.-based consulting firm Auto Pacific. "And Toyota has won. They won by being the firstest with the mostest."
The race to sell clean vehicles with new technologies is more likely to be a marathon than a sprint, but the Japanese have a solid head start.
"It's clear that we've just got to get this product on the road," Wagoner said of the Saturn Vue.
"We've been talking about a strategy which we think is interesting and logical and creative versus what others have done. But until you get the product on the road and people see how it works and the relative merits, it's hard to do." |
