Demand for Hybrids Soars, Paper Says; VW Considering Gas-Electric Jetta

Washington DC May 31, 2005; AIADA newsletter reported that ”With gas prices hovering near record highs, dealers are selling every hybrid they can get,” reports the Detroit News. “

Waiting lists are so long that many customers are paying extra just to move ahead in line. Others are paying full sticker price for a used hybrid -- a practice rarely seen outside the trade of Ferraris and other super sports cars.” Edmunds.com pricing and market analyst Mike Chung insists, “We’ve never seen this type of demand for a vehicle that is somewhat mainstream.”

Besides fuel efficiency and low emissions, “demand also is fueled by factors ranging from the novelty of the technology to tax breaks and access to carpool lanes in some cities, and even political concerns,” reports the News. Although hybrids currently account for only 1 percent of total U.S. auto sales, Chung predicts that share for the fuel-efficient hybrids will triple or even quadruple over the next three years as hybrid technology reaches more models.

J.D. Power and Associates estimates that by 2008, hybrids will account for 3 percent of the U.S. light-vehicle market. From the News: “Toyota already has 12,000 U.S. orders -- a six-month backlog -- for the hybrid Highlander sport utility vehicle, although the model will not hit showrooms until June.” And advertising for the automaker’s new six-cylinder Lexus RX 400h hybrid had to be curtailed in order to slice the order backlog, which now stands at 9,000.”

What’s more, automakers that have strayed away from the hybrid investment are now getting into the mix. “GM and Nissan now plan to offer full hybrids. GM teamed with DaimlerChrysler AG in December to develop front- and rear-wheel drive hybrid vehicles. Last week, Nissan announced plans to produce a hybrid Altima sedan in North America in late 2006, using technology licensed from Toyota. ”

As several automakers ready models for entry into the hybrid segment, Automotive News reports that German automaker Volkswagen AG may be considering a hybrid-version of its popular Jetta car. “A VW spokesman confirmed that VW is considering a so-called mild hybrid vehicle. A mild hybrid uses an electric motor to assist a gasoline-powered engine, but the motor alone does not drive the vehicle. The Honda Civic Hybrid is an example,” reports Automotive News. “VW did not forecast sales volumes or discuss the costs. The company said it has not decided which supplier would provide the technology.”

The automaker said the Jetta may likely be introduced in the U.S. in two years.