Ford VP: "You can't sell a hybrid in today's market"

Interesting, they seem to be selling quite well based on reports here! I don't think more than a day or two go by where there's not a post from a new owner! Maybe Farley should look beyond Ford sales figures...

 

Paul,

10 years ago I wouldn't have touched a Hybrid with a 10 foot pole even though they were actually pretty decent even in Gen1 form.

As you know this week I bought my first Hybrid...a Prius. People(myself included) are now becoming more educated on how a Hybrid can be a mainstream car. The myths are being dispelled and more are accepting them. When gas spikes again(and it will...eventually), then we will see a mass influx of Hybrid buyers now that people have heard so much good things about these cars. The question for me is what will the price of Hybrids be when gas is at $3+/gallon? If my Prius was $30,000 no way would I have bought it. The economy of it has to make some reasonable sense. Then again if gas was $7/gallon, that $30,000 Prius is looking better and better.

It seems to me people have accepted $2.50 gasoline as the new normal. Even if it stayed at $2.50, the government is eventually going to up the ethanol content to 15%(if they stop there). More ethanol means less MPG which means people need to buy more gas.

I feel like I got our Prius at a time when people are complacent and because of that I got a great deal trading in our Veracruz on a Prius. Should gas go to $4/gallon there would be no way to get a reasonable price for any variety of SUV let alone getting a Prius for under invoice. Now is the time to jump on a Hybrid.

Maybe I'm totally wrong. Maybe gas will hover between $2 and $2.50 for another 10 years with no spikes. Maybe there will be another boom in SUV sales as people get complacent. Maybe the Prius will be the worst car buying decision I ever made......But I doubt it.

Craig

 

Hi All,

If a good fraction of new cars are not hybrids, gasoline will rebound up to $3.50 a gallon in a few years. But, people all seem to think its the other guy's duty to keep gas prices down. Its the accountant point of view: "Why should I pay for something that does not pay for itself". Because in the real world, economics trumps accountancy, and more gas used, is a higher gas price.

 

Interesting that Ford just priced the Lincoln MKZ hybrid at MSRP $35,180 which is the same as the gas version. The famous Econ assumption "other things being equal" why wouldn't you buy the hybrid?

 

I remember a short two years ago when gas was $4.00+ a gallon, you couldn't find a Prius, and the ones that were available went for a premium (MSRP+). This will happen again, oil is already selling at $75-$78 a barrel, but has been overtly absent from the news... Prices have already begun to creep up and will continue through the winter months. This summer was the perfect time to take advantage of Toyota's mis-fortune over the recalls and the drop in fuel prices. We may never see premium Hybrids offered at these prices again! All those folks who opted for a new SUV this summer will be crying by spring. Just wish I had the assets to have picked up a couple more Prii at the price I paid, just to sell them when gas tops $3.00 a gallon and all the current incentives are gone...

 

Because Ford isn't making very many of them. Accordingly, for the MKZ hybrid, you pay the dealer the MSRP. For the non-hybrid you get a couple thousand off.

How do I know? I tried it. But I really like my new 2010 Prius just fine.

 

I just saw a post the other day complaining about green energy subsidies: "If oil is running out, why is gas so cheap?" Obviously the poster is not 55 years old. I still remember getting gas for 17.9 cents a gallon (at the rare self-service station!).

 

In this, I somewhat agree:

What is its competition? It is easy then to make a compare and contrast table. But it raises a thoughtful question about the USA market.

His comment suggests the USA market has moved towards a 3d world profile. On the low side are growing numbers unable to afford a $35k car. On the other side, a smaller percentage of customers who consider a $35k car too cheap.

Bob Wilson

 

I think the key is- "in todays market".
Of course most people are going to focus on "You can't sell a hybrid".

But Jim Farley is in many respects correct. He's correct because he's looking at it as a Vice President of Global marketing and not as a consumer with the desire and the resources to afford a hybrid.

The Prius is succesful. And despite the millions sold, from a totally global automotive perspective we should try to divorce ourselves from the initial reaction a Prius supporter and Hybrid supporter will have, and that is to take his general observation and opinion and frame it personally. I'm afraid many will read, You can't sell a hybrid...(I shouldn't of bought a hybrid)...that's not what Farley is saying.

My arguement with Farley wouldn't be about the viability of selling a hybrid in todays current state of economics and automobile manufacturing...because I believe he is correct, the majority of the market and desired market is still based on conventional ICE automobiles.

My only comment would be why would anyone think "todays market" is going to stay static?

Painting with only the colors black and white, and Farleys statement stands. Hybrids, Electrics while growing in acceptance and availability still remain a fringe and small percentage of the entire automotive manufacturing and sales.

To me despite the success of The Prius, which Toyota has invested into heavily, Farleys statement is in general correct. From the viewpoint of global marketing for a major automotive manufacturer, Hybrids are not yet marketable as entirely mainstream...BUT...

But while I'm willing to accept the statement "you can't sell a hybrid in todays market" I'd also argue...Hybrids and Electrics are inevitable. Todays reality will not remain static, and only one of the reasons is because of the finite supply of Oil this world is using. I believe we will reach a time where the correct statement becomes You Must Sell a Hybrid for Todays Market.

Either technology and industry and marketing adapt to the non-static reality of the economics born out of a changing society or it will die. If not, Farleys statement becomes akin to the wagon wheel maker, who reads an article about the "New Fangled" horseless carriage and proclaims "You'll never sell a Horseless Carriage in Todays Market"...because as he looks out his window at that precise moment, as the horses gallop by, he might be absolutely correct, but as progress marches forward, the statement becomes entirely false.

Don't take his statements personally Prius Lovers. He's saying it from the perspective of an executive of a major automotive manufacturer, charged with looking at the pace of change of a automobile manufacturer, which is a different than what you, I and others willing to embrace Hybrid technology and looking forward to new products and automotive options.

He's forced to look at it Black and White, but we as consumers and many of you as Prius owners already know something that will become evident. Change...is inevitable.

 

10 years plus 10 days ago, I did. It proved to be a remarkably wise decision, well ahead of the emission & consumption problems to come.

We're in a state of change now, where one hybrid has become part of the mainstream and others are struggling to achieve the same success.

Misconceptions from 10 years ago are just a faded memory now. Automakers know the days of traditional guzzlers are numbered. As the economy recovers, the draw to easy profit will make the challenge of delivery a competitive even less appealing... especially if gas prices don't go up. They'll attempt to squeeze out every last opportunity as long as they possibly can before committing to significant production changes.

Resistance is futile. Yet, they make excuses not to anyway.
.

 

+1
Let me build on what john says:
Dear Ford Prez,
Here you are ... whining about not being able to sell hybrids in today's market. Sorry, but SOME of us are students of history. History repeats itself. Ford (& other auto builders) ALSO said:
We can't sell cars with catalytic converters
We can't sell cars with padded dashes
We can't sell cars with air bags
We can't sell cars with higher mileage
We can't sell cars with complex emission systems
We can't sell cars with crumple zones
We can't sell cars with (insert your memory here)



Sadly, this guy needs to pull him self up by his baby boots, and grow some vision. When he gets to the point when he can say, "You can't afford to NOT sell a hybrid (and full on electrics) in today's market", maybe then he'll have a grasp on reality. Sadly he needs to grasp how dire fossil fuel supplies are ... and how U.S.A. money is flowing out of the country at light speed ... with the U.S.A. going into debt, because we pay fuel dollars to countries trying to destroy us. Sadly, that means we have to pay our remaining dollars into a trillion doller military, defending us from the (now well armed by the U.S.A. petro dollars) psycho religious middle eastern nut jobs who can now afford to arm their self to the teeth. 911 ... how quickly and apathetically we forget. No ... I'm sorry, but Ford's prez needs to quit talking like GM.

.

 

how long has honda been selling hybrids? have they had any success? how do you measure success?

 

I think his reasoning might be simple but its sound. The hybrid market is one that is very hard to predict what vehicle will win or lose. Lets look;
-Honda who has a huge image or being "green" has failed at hybrids for over a decade
-The Prius is by far THE hybrid and the face of the industry
-Some hybrids focus on MPG, others on performance and bringing a "halo" to the brand (GS 450h, LS 600h L, X6 and 7 series active hybrid, S400, Cayenne hybrid).
-RX 400h/450h very well recieved
-Fusion well recieved
-Most others not so much

As much as I love Lexus the HS is a flop. They predicted 24k sales and they might hit half that. Styling, price, features, marketing all were off to me. However it REALLY goes back to what the VP said

GAS PRICES ARE STABLE

Outside the Prius hybrids sell in small quantities. Most buy non hybrid counterparts to the hybrid ones (Fusion, Camry etc). With gas stable, people have no interest in more MPG.

Case in point, SUV sales have jumped way up again. People have short attention spans. There still is A LOT of misconceptions on hybrids. I get asked constantly "where do I plug the car in" !! Its 2010!!

Maybe it will be more accepted if the GERMANS accept it? If we see more hybrids from Germany maybe that will shift public perception?

 

First off, my hat is off to you and the 54,000 pioneers who made the NHW11 Prius a success. Certainly the Prius has become so mainstream that even the skepticism remains some what ossified. The latest has tried to 'except for the Prius,' paint the same old chestnuts on the remaining hybrids . . . which sad to say, rings true for the GM hybrids.

I don't quite share your optimism because so many of the hybrid and EV announcements came right after the law was changed and CAFE standards went up. Ford and Toyota have a clue and Honda does their best. I just see too much 'reaction' than a planned response to a common view of oil shortage. Changing CAFE standards does not necessarily change a customer's attitude on which should be their next choice. I fear something else is needed, closer to their wallets.

Personally, I just wish we could see more growth in the hybrid market. I collected the Dashboard reports for June to see the trends:


The effects of the 2007 gas price hike is evident. Then 2008, gas prices and the economy started to soften. In September 2008, the banking crisis began. In June 2009, we're really in the pits and June 2010 suggests, hopefully, we've reached bottom.

The only bright spots in June 2010 are the Ford Fusion that probably took Camry as well as Highlander sales. The Honda Insight has replaced the Civic which dropped below 1,000 units in June.

Bob Wilson

 

Why did you drag Ford prez Alan Mulally into this? He was much smarter than that when he went from Boeing to Ford.

The OP article refers to VP Jim Farley.

 

Whether one is talking about politics or about business, when the VP says something, it better darn well parrot the thoughts and words and actions of his boss. If not, (s)he'll be looking for a new job. Yes, I could have directed the prior post to the VP, but let's see .... where does the buck stop?

.

 

Great points. I mean its funny people constantly want to break down the "worth" of a hybrid with some simplistic gas price formula.

Is a V-8 worth it over a V-6 if you don't use the additional performance much?

Is an exotic not worth it since you can't use its full potential on the street?

Is a 7 seat SUV worth it over a 5 seat if you don't use the 2 extra seats but twice a year?

I mean we can argue "worth" to any vehicle purchase.

 

It's true that selling hybrids and EV's is tougher when you have "low" gas prices and a recession. But the automakers need to bring them out now, not scramble to throw something crappy together when the situation changes again! Get the cars out so the early adopters can drive them and give feedback on making improvements!