Eric Morath / The Detroit News
If actions speak louder than words, some might wonder what all the environmental fuss is about in the auto industry.
While consumers overwhelmingly say they want cleaner, more fuel efficient vehicles, they don't want to pay a premium of up to $10,000 or compromise on performance.
Less than 6 percent of vehicles sold in the United States last year were equipped with alternative powertrains -- mainly gasoline-electric hybrid cars and diesel trucks -- according to an estimate by J.D. Power and Associates, based on sales through November.
Still, automakers and industry experts agree that a green revolution is under way, evidenced last year by growing sales of fuel-sipping models, including subcompact cars and hybrids, as demand for sport utility vehicles plummeted.
At the Detroit auto show next week, automakers will unveil a host of green vehicles and technologies.
Rising gas prices and concerns about global warming and U.S. dependence on foreign oil are driving demand for greener vehicles, said Chrysler LLC Vice Chairman and President Jim Press.
"We are at the dawn of a renaissance for the automobile," he said. "The market has become more thoughtful on these issues. It's no longer a niche, it's a progression."
To overcome buyers' apprehensions about the higher cost of advanced vehicles like hybrids -- the premium can be as low $2,000 with tax breaks -- and uncertainty about new technology, automakers are stepping up their green marketing efforts.
Raising consumer awareness should boost demand, driving up production and bringing prices down. J.D. Power predicts that diesel and hybrid vehicles will account for 13 percent of U.S. vehicle sales by 2012, helped by stronger marketing. Ongoing worries about gas prices and the introduction of more green models to meet higher federal fuel economy mandates should also drive up sales.
For now, though, while a Harris Interactive survey found that 83 percent of car buyers say they are interested in alternative fuel vehicles, the notion that consumers are already running toward green vehicles is overstated, said Sandy Stojkovski, a fuel economy expert and director of vehicle engineering at Van Buren Township-based Ricardo Inc.
Some hybrids and other vehicles already achieve fuel economy at or near the new 35 miles per gallon standard the government set for 2020. "The technology is out there," Stojkovski said. "If consumers really cared about fuel economy, wouldn't consumers flock to them? Currently they are not."
Many customers still fear that driving a more fuel-efficient vehicle will require major sacrifices in terms of performance, she said.
'Education is key'
Selling the first hybrid vehicles was relatively easy, according to Press, a former high-level Toyota Motor Corp. executive.
When Toyota launched the popular Prius hybrid in 2001, buyers were eco-minded techies with deep pockets. Today's buyers want better gas mileage and lower emissions from vehicles that are reliable and safe; and they are much more price-sensitive.
Press compared the greening of vehicles to the growth of safety systems 30 years ago. Safety belts used to be optional; now, no car is sold without them and a host of other safety features.
For consumers to buy in, they have to understand the benefits. So just as automakers advertise "five-star" crash test ratings to promote vehicle safety, fuel-economy, alternative fuel options and other green features will gain more prominence in automotive marketing.
"Education is the key," Press said. "Many consumers don't understand the technology, but what they really want to know is the end results: cost, performance and fuel mileage."
The challenge for automakers is that customers say they want to buy greener vehicles from greener companies, but they don't always make that choice on dealer lots.
There are clearly two categories of buyers, said Larry Dominique, vice president of product planning for Nissan North America Inc.: True environmentalists willing to pay a premium and make an extra effort to contain pollution, and everybody else.
"Most Americans fall into an area we call selective contributors," Dominique said. These are people who tend to choose the ecological option if it doesn't cause them inconvenience.
Marketing targets buyers
Automakers are targeting green-minded consumers in varying ways. Nissan and Chrysler offer a range of environmentally friendly options, including hybrids and diesels.
General Motors Corp.'s Chevrolet brand takes the idea of a broad approach even further. In its "Gas friendly to gas-free" campaign, GM bills Chevy as its environmental brand with fuel efficient cars today and vehicles that will run without gas in the future.
"Many people think of Chevy as a truck company that makes some cars," said Chevy spokesman Terry Rhadigan. "But our brand has made fuel efficiency a pillar. When gas prices go up, Chevy might not be the first thing you think of, but we are going to change that."
Leading that charge is the heavy marketing of the Chevy Volt, a plug-in concept car. In an unusual move, GM created everything from billboards to television commercials about the vehicle, which customers can't even buy yet.
The marketing is intended to portray GM as aggressive on green and to create a "halo" that draws customers to higher mileage models already in GM's lineup. Ford Motor Co. is also using the allure of hybrid technology to attract buyers. When the automaker last year launched its redesigned Mercury Mariner, it heavily promoted the hybrid option, even though the vast majority of Mariners are sold with standard powertrains.
"The hybrid built awareness of the overall brand," said Eric Peterson, brand manager for the Mercury Mariner. "It's a point of differentiation in the marketplace."
When Toyota launched the Prius in the United States earlier this decade, its marketing tactics reflected the vehicle's niche status. Instead of television commercials, Internet viral marketing told the story. Hollywood stars, such as Cameron Diaz, professing their love for the clean machines on late night talk shows, didn't hurt either.
As hybrids move into the mainstream, so is Toyota's marketing. The automaker still does grassroots barnstorming at state fairs and auto shows, but it generally markets hybrids just as it does its other cars and trucks, said spokeswoman Cindy Knight.
"Our task is to show that there is no sacrifice with these vehicles," she said. "They are as reliable and durable as any Toyota product."
Hybrid buyers know facts
Toyota dealers are stocked with videos and marketing materials that explain hybrid technology, but Jim Tuohy, general manager of Serra Toyota in Farmington Hills, said he rarely has to convince a customer to consider a hybrid. "A hybrid buyer arrives as a buyer," he said. "They are the most educated customers on any product."
Those who consider Toyota's three hybrid vehicles are concerned about gas mileage, but many are also looking to make an environmental statement, Tuohy said. Even though gas savings on a hybrid are unlikely to offset the hybrid premium during the course of a three-year lease, many customers still lease the vehicles. Hybrids account for about 10 percent of Serra Toyota's total sales.
Chao-Chi Lee visited Serra Toyota recently because he is looking to replace his Toyota Highlander hybrid, possibly with another hybrid. "Saving on energy cost is the main benefit," he said.
When customers buy an alternative vehicle, they most often look at hybrids or models with diesel engines, which are more fuel-efficient than their gasoline counterparts. But the best selling alternative models are flex-fuel vehicles capable of running on gasoline or E85, a high ethanol-gasoline blend.
Numerous big-volume vehicles, including the Chevy Impala, Ford F-150 and Dodge Grand Caravan, are sold as flex-fuel vehicles. But that capability is rarely the main factor in a sale because E85 is not readily available, with only about 1,000 E85 pumps nationwide.
Running a vehicle on E85 actually results in lower gas mileage, but supporters like it because it mainly comes from a renewable source, corn, and lessens the nation's dependence on foreign oil.
"It makes sense from an environmental standpoint and it's something I can do that is not a huge effort or time consuming," said Derek Lenz of Berkley, who drives a flex-fuel Ford Explorer.
Green vehicles won't truly become mainstream until there are numerous options to meet specific regional needs, said Jon Linkov, managing editor for autos at Consumer Reports magazine.
Ethanol, or E85, will be most popular in the corn-producing states of the Midwest; hybrids will rule in stop-and-go coastal city driving and diesels will appeal to long-distance, freeway travelers.
For that to become a reality, automakers and dealers must turn consumers on to new alternatives.
"It's going to take a lot of opening people's eyes and shaking preconceived notions," Linkov said. "Customers must take a fresh look at everything."
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