Friday, July 11, 2008

11 Exclusive Disadvantages Of Hybrid Cars!

A recent study by NADAguides revealed that only a handful of Hybrid Cars at present make sound financial sense, and only for some of those considering to buy the automobiles due to rising gas prices.


The advantages and disadvantages of hybrids have been debated for long. The following are 11 opinions against the hybrids, which have been echoed from time to time. While some might be genuine, others could be dated and some just bad publicity. Once, you've skimmed through them, you might want express yourself by writing comments.

  1. Price: Hybrid cars are known to cost higher, about $2,000 to $5,000 more than autos running on petrol or diesel automobile engines. Large battery packs and technology used is usually blamed for higher cost for these vehicles.
  • Costly Registration: Some states in the US charge more as fees towards registration, adding on to the initial high charges.

  • Costly Insurance: Since insuring costlier autos is expensive, the same applies to insuring a hybrid that’s costlier than its gas operated counterpart. Apparently, you don’t get any special offers on insurance if you buy a hybrid, if at all you get the insurance.
  1. New Technology: While the manufacturers rigorously test the autos before they are brought out in the market, the relatively new invention of a hybrid might come up with a type of problem that’s not been conceived or discovered yet. Further, in such an event it could take some time before a solution is formulated.
  1. Safety: Here’s another concern that’s high on potential users’ minds and this is something that most humans that inhabit the planet wouldn’t want to compromise upon. The following are the key points of “terror!”
  • High Electric Charge: Most of these cars make use of huge packs of automobile batteries and there’s an enormous amount of charge within them. In case of an accident, all that potential electrical energy can cause further injuries to the occupants, if not electrocute them. Further, cutting out electricity connections is one of the foremost priorities of the emergency rescue workers during vehicular extrication, with more electric batteries than ever to deal with, the danger looms large and rescue efforts could be stymied. Finally, the charge reaching any leaking fuel or an automatic deployment of airbags unnecessarily poses an additional threat.

  • A Bit Too Light: Since these new age babies are lighter, they are prone be damaged more during stormy conditions if not literally be blown off the ground during high winds. Furthermore, lighter weight means lesser mass and thus these vehicles aren’t quite compatible with the weight of conventional cars, hence the forces generated during a collision might impact them more or they might spin like a top.
  • Dangerous to Pedestrians: Recently, many eyebrows were raised at the US senate about the danger posed to blind individuals navigating the road by super quiet cars. Consequently, the senate preliminarily approved a bill to study how to deal with hybrid vehicles that are a bit too quiet for blind persons.
  1. Maintenance: Apart from the initial cost of purchase sometimes maintaining the machinery to becomes somewhat challenging.
  • Break Down: In the event that your car breaks down the relative exclusivity of the cars technology could be somewhat troublesome for you to get a quick fix. The cars being newer your local mechanic or others like them might not be prepared or have the skill set, or the automotive tools to repair it. Moreover, the replacement of complex and exclusive components might burn a bigger hole in your pocket.

  • Batteries: Sometimes, the batteries of the car need to be recharged at least once in 15 days. In case you need to be away from your home and your car, you might need to think twice before leaving your car to “rot” behind you, or you might have to make an arrangement for someone to take care of it. Further, batteries are a costly piece of equipment and with the hybrids they usually need to be replaced every 150,000 to 200,000 miles.
  1. Performance: Other concerns relate to these cars not possessing the same abilities as their conventional counterparts, these cars seem to be falling short of perfectly matching the performance of the gas cars.
  • Slow Acceleration: The new age autos for now are a bit slow to accelerate when compared to their conventional counterparts. Hence, it might just take a bit of adjustment on the owner’s part about the envy they might feel of the conventional cars and their users. Or perhaps as more R&D goes into making these autos match up to the gas only cars, they could indeed be at par in reality albeit after sometime.

  • Less Towing Capacity: For those users who’re interested in the towing capacity of these cars may again find it somewhat lower in comparison to gas cars. A solution would be to purchase a hybrid SUV that inherently has more power, but the towing consideration by itself hardly makes sense to go ahead with such a purchase.

  • Less Mileage: Surprisingly, lower fuel costs is what the unique selling proposition of these cars, and they are indeed more fuel-efficient than the gas cars. The problem reportedly crops up on freeways and highways where the fuel mileage compared to gas cars is either at par or worse than the gas cars. Some even opine that owing to a large number of battery packs these cars become heavy, thus affecting fuel economy negatively. Intriguing!

  • Cold Whether: Batteries have a hard time performing in cold weather, sometimes they are half as efficient compared to warm whether conditions. Consequently, the automobiles powered by batteries too would have a hard time performing in the cold.
  1. Environmental Pollution: Claimed to be environment friendly, they aren't 100% environment friendly, they do comprise a gasoline engine which does behave the same as that the usual gas cars, so they seem to be only relatively better.
  • Manufacture: The eco-friendliness of these cars has been questioned on account of the manufacturing process. It has been estimated that to manufacture a hybrid leads to more energy consumption and environmental pollution compared to manufacturing a normal gas car.
  • Ecological Hazard: In case a hybrid is involved in a mishap and lands up in a pond, a lake, or a canal the leakage of the battery constituents might lead to an ecological hazard, similar to the one like an “oil slick,” albeit on a smaller scale.
  1. Ugly styling: Many people have questioned the styling of these vehicles and also that there are just a handful of models around to choose from. Sometimes, potential buyers have found the existing models too “ugly,” to be bought.
  • Less Space Inside: Due to the requirement to house voluminous battery packs some of the models have to compromise on the space that’s left inside, apparently too much room has to be allocated to secure the batteries.
  1. Resale Value: The resale value of the vehicle raises another question mark on their cost effectiveness. The warranty of the battery usually runs out of time after a drive of 80,000 to 100,000 miles. Now, given an automobile with a technology that’s still maturing and with warranty not available for expensive battery replacements, the trouble of repair, maintenance and spare parts, a used hybrid doesn’t offer a good value proposition.
  1. Need To Learn New Driving Habits: The driving habits needed to reap the benefits from a hybrid car somewhat vary from the gas driven ones. For instance, and for these cars stopping and restarting the engine in effect consumes more power, so you’d need to be habituated in case you aren’t. Driving slow is the key and drivers should maintain constant speeds. Other driving advice specific to a hybrid might put pressure on the buyers to necessarily learn the new tricks.

  2. Difficult To Purchase: Purchasing a hybrid could make it tough for you due to a couple of reasons. First, you need to educate yourself of the technicalities about the various types and technologies used by different manufacturers, not all hybrids are created equal. Second, a manufacturer is less likely to give you a neutral account about the vehicle’s merits and demerits, as they would be more interested in selling than telling. Third, getting first hand experiences and authentic reviews could be difficult as well.

  1. It Takes Too Long To Reap the Benefits: It’s claimed that the cost savings on fuel in the long run would offset the initial costs incurred, but apparently this long run is a couple of years not days or months. The latest study by NADAguides showed that a driver in Los Angeles (highest gas price location), will break-even about 18 percent faster than a driver in Houston (highest gas price location). Further the distances to be covered by driver in the study range from 18,292 to 67,685 miles to just break-even. So you could be in for a wait of about a year, or less or even more based on your travel metrics.
I'm sure, there's a whole lot more to consider before making a purchase decision that really makes a difference. Perhaps there's much more than moving ahead with purchase simply because gas prices are moving north.

Saturday, July 5, 2008

AutoTrend: Automobile Buyers' Hunting Ground

Despite the present tough times for the auto industry, automobiles are still selling, albeit a bit less. As consumers continue to search for cars, with an increased focus on fuel economy than power, auto marketers would need to keep a tab on the sources of information car buyers seek so that the buyers remain accessible to them.

A recent J.D. Power report highlights the hotspots car buyers frequent in search for information for making a purchase and more. Following are some of the insights from the study.

An Exodus to Online Television

  • “A majority of new-vehicle buyers—68 percent—report going online to find information on television shows”
  • “The reach of online television show content among new-vehicle buyers has increased by 22 percent since 2007.”
  • “Television show content is among the top three types of online information consumed by new-vehicle buyers, along with travel-related information (including maps, driving directions and weather reports) and news (including finance and business-related content).”
  • “Television network sites are issuing online broadcasts of archived television shows, which exposes viewers to pre- and post-roll advertising placements.”

Migration based on Car Buyer Segment

Premium Brand Vehicles

  • “Buyers of premium-brand vehicles tend to seek online television show content with the greatest frequency, and are 8 percent more likely to look up information about television shows online, compared with the average new-vehicle buyer.”
  • Furthermore, “Premium-brand vehicle buyers tend to be frequent users of digital video recorders (DVR), and of the 49 percent of buyers who have DVRs, the vast majority of them—97 percent—tend to skip commercials when they watch recorded TV programming.” Advertisers don't need to sulk at this because, the buyers' “propensity to view television content online provides an ideal alternative way to expose advertising messages to this audience.”

Other Vehicle Segments

  • 79 percent of midsize premium utility vehicle buyers view this type of online content.
  • 76 percent of compact premium crossover utility vehicles (CUV) buyers view this type of online content.
  • 75 percent of midsize premium CUV buyers typically view this type of online content.
  • And “The biggest increase in consumption of online TV content is among buyers of midsize premium conventional vehicles, a rise of 41 percent since 2007.”

Visits Based on Age

  • Generation Y new-vehicle buyers (those born between the years of 1977 and 2002) have always viewed online television content. “While 81 percent of Generation Y buyers visit Web sites regarding television shows...”
  • But now other generations too access the content as much as them. “80 percent of Generation X buyers and 73 percent of Baby Boomer buyers are also seeking this content, demonstrating that this medium is an effective way to reach new -vehicle buyers in various generational demographic groups.”

Why is the Trend Important?

  • Experts estimate that less than 15 million new vehicles will be sold in 2008, which makes it a about a million less than 2007, when 16.1 million were sold.
  • Tracking the trends is important, “As new-vehicle sales shrink, understanding which advertising mediums will provide the best balance of audience reach and composition is absolutely critical.”

  • Also because as an increasing number of new-vehicle buyers seek information regarding television shows on the Web, advertisers would benefit by zeroing in on these sources.

Moreover, the study also found, "that new-vehicle buyers most frequently visit the following Web sites when searching for television content: CNN.com (with 30% reach among new-vehicle buyers); MSNBC (24%); ESPN (23%); and FOXNews.com (21%). Among television network Web sites, ABC is visited most frequently by online users (with 16% reach among new-vehicle buyers), followed closely by CBS and NBC (each with 13%)."

Aside from online television networks study, the Internet as a whole should be an important resource for automotive marketers. The following figure presents the 10 most popular automotive websites. I came across this one at marketing charts, they've got many more interesting marketing graphics.


Thursday, July 3, 2008

Auto Industry Turmoil - How Long will it Last?

This year has been tough on the auto industry worldwide, for the most part due to rising fuel prices. The North American automobile industry has been especially hit.

In North America

The biggest buzz seems to have sprung form the Meryl Lynch report, and the idea that they couldn't rule out bankruptcy for the world's largest automobile manufacturer, General Motors. At the same time the company's stocks fell to a 54-year low. And all of it ocurred at a time when GM reported uninspiring sales figures (i.e. 265,937) in June this year.

In order to avoid bankruptcy, GM would need to raise $15 billion in cash as has been said. While the company hasn't responded to the report, but it thinks that it's got enough cash for 2008 and that it would take the required measures if needed.

However, it's not just GM that took the hit, Toyota's sales also came down by over 21%, while Ford's figures showed a drop of 28.1%. For the most part the mechanism seems to be the same, that is lower demand for gas-guzzlers owing to high fuel prices.

Meanwhile in Canada the trend has been replicated with the auto sales plummeting by 5.7 percent from last year to reach 159,500 vehicles in June. The drop is significantly higher than the 0.5 percent fall in May.

In Europe

It seems that the economic downturn and the fuel price hikes have impacted European auto industry too. This could be seen in the drop in the number of new vehicles registered in June. While in Spain the drop was to the tune of 31%, in Italy the registrations came down by 19.5%. However, surprising as it might seem, the German car sales have picked up despite the odds, by 1% in June, and so have the French auto sales, which registered an improvement of 2.1% from June last year.

In Asia

The Japanese auto industry isn't celebrating at all, although it did a couple of days back. If you take away the sales of minivehicles, the sales for June have come down by 3.6% year-on-year to halt at 281,261 units. There's also a sentiment around in North America that many Asian nations such as China, Japan, Korea bolster their auto industries with subsidies, but it's different for the industry in North America. At the same time, one reason the cheap labor in many Asian countries, which is because they don't have a well-unionized workforce, and hence don't demand hefty benefits as is the case in the west.

So How Long is it going to last?

Predictions were made earlier as well, wherein it was said that things could begin to look up for North America by 2009. However given the present trends, some experts feel that for the North American industry revenues could decline in 2008 and 2009. And that we could see increasing losses as the year-end approaches.

Well, forecasts are after all forecasts. While the sun's certainly not expected any time soon, but what actually happens only time will tell.

Tuesday, July 1, 2008

AutoEvent: The Tokyo Motor Show

Over 50 years old now, the Tokyo motor show has been a center of attraction since 1954, for all those interested in the automobile industry.

The show is popular for featuring state-of-the-art and futuristic technologies in the form of concept automobiles including trucks, buses and cars. You can expect to find huge array of fresh concepts all across the show. There are so many of 'em that you might find it tough to follow each of the exhibits in detail.

History

During the early history of the show, its focus remained on passenger vehicles viz. truck and buses. However, in the wake of the growing Japanese auto industry and trading of Japanese cars around the world it expanded focus to include passenger cars. Even now when the auto industry in the western hemisphere finds itself under rough weather, the Japanese auto industry hopes for landmark performance.

Organizers of the show, the Japan Automobile Manufacturers Association, changed the format of the show beginning with last year's event (i.e. Tokyo Motor Show 2007). Now the show will be held once every two years, with the commercial vehicle show to be held in year in between. The next episode of the tradition is the forty-first, Tokyo Motor Show to be held in 2009.

The biennial event promises to include a comprehensive range of passenger cars, motorcycles, commercial vehicles, commercial vehicle bodies, and vehicle parts.

Tokyo Motor Show 2007

Carrying the theme “Catch the News, Touch the Future,” the event was held at Makuhari Messe, Chiba and lasted a good 17 days, from October 26, 2007 (Friday) to November 11, 2007 (Sunday).

Visitors

Close to 1,425,800 people visited the show, however this number was considerably less than numbers who visited the show in 2005. In 2005 about 1,512,100 had come to the show.

Premieres

Considering both the Japan and the world, a good number of premieres surfaced at the event. Numerically, there were 77 World Premieres (5 commercial vehicles, 36 passenger cars, 32 motorcycles, 4 vehicle bodies) and 103 Japanese premieres (2 commercial vehicles, 75 passenger cars, 26 motorcycles).

Technology Featured

The themes and focus of the recent past shows have showcased drivetrains and its components viz. transmission, drivelines, etc, and fuel-cell and hybrid vehicles.

During the 2007 event fuel-cell and the hybrid vehicles stole the limelight. For instance, Toyota featured a concept vehicle "1/X" or "one-Xth."

Similar to a Prius, the vehicle claims to achieve twice as much fuel economy. It features a featherweight automotive frame made from carbon-fiber-reinforced plastic, which also helps to save gas.

The concept further has an additional plug-in hybrid powertrain, which can run on either gasoline or E85 (a mix of 85% ethanol and 15% gasoline).

Tokyo Motor Show 2009

The 41st Tokyo Motor Show 2009 will run for 17 days, from October 23 through November 8, 2009. The public would however be allowed entry from October 24.

The show like the previous years would include passenger cars, commercial vehicles, motorcycles, commercial vehicle bodies, automobile parts, machinery and automotive tools as exhibits.

Entertainment is supposed to be a key feature of the event, that would encourage audience-participation, hands-on events to make the contact the man and the machine more meaningful.

Following is the key information of the upcoming show:

Show Name: The 41st Tokyo Motor Show 2009.

Organizer:
Japan Automobile Manufacturers Association, Inc.

Important Dates: Friday, October 23 - Sunday, November 8 (17 days)

  • Press Days: October 21 and October 22 (2 days)
  • Special Guest Day: Friday, October 23 (1 day)
  • General Public Days: October 24 - November 8 (16 days)

Venue: Makuhari Messe, Chiba City.

If you'd like more information on automobile trade shows worldwide, here's a great resource replete with information on automotive trade shows. You might also want see the review of auto trade show SEMA 2008 that I did earlier.