xcel
07-17-2006, 12:23 PM
Expedition sales down 33%; Durango, 37%; Avalanche, 45%; Armada, 23%; and Sequoia, 30%. (http://www.forbesautos.com/news/headlines/2006/july/fdc071106-guzzler.html)
Jerry Flint - Forbes.com - July 11, 2006
http://www.cleanmpg.com/photos/data/501/Toyota_Sequoia2.jpg
Lower sales due to gas prices - Toyota Sequoia 4WD - EPA 15/17 mpg.
NEW YORK - Trucks, pickups and big sport utility vehicles are where the money has been for Detroit. That is how General Motors, Ford Motor and Chrysler have survived the onslaught in the passenger car market from the likes of Toyota Motor, Honda Motor, Hyundai and BMW.
Today, with gas prices at their current levels, the truck business - for both U.S. and foreign nameplates - is in serious trouble. In six months, Ford Expedition sales are down 33 percent; Dodge Durango sales, 37 percent; Chevy Avalanche sales, 45 percent; Nissan Armada, 23 percent; and Toyota Sequoia sales, 30 percent.
Don't give up on the auto industry, however.
Here is why. Starting a year from this fall, General Motors, working with DaimlerChrysler and BMW, will have a new hybrid system for their bigger vehicles. Unlike the gas-electric hybrids currently offered by Toyota, Honda and Ford, the new system - called two-mode - is suitable for towing heavy loads, something that owners often do with their bigger rigs. GM has said that it looks for 25 percent fuel savings compared with a conventional V8. Some of these savings come from a system already in place in some vehicles, such as the piston shutdown that runs the V8 engine on just four cylinders at cruising speed. But the promise is 25 percent fuel economy over a conventional vehicle that lacks the newer technologies.
GM will start putting the two-mode system in big SUVs like the Chevy Tahoe, Suburban and Cadillac Escalade. Pickup trucks will probably come later. The Dodge Durango is a likely candidate for initial availability in a Chrysler vehicle. BMW and Mercedes might be thinking of using the system in their luxury cars.
The car companies say they have optimized their new two-mode system for both city and highway driving, whereas optimal performance from hybrids currently on the market is only with city driving. The new design integrates proven automatic transmission technology with a hybrid-electric drive system. Among its features is the ability to operate with electric power only at low speeds and light loads.
My question is what happens to competitors - meaning Ford, Toyota and Nissan Motor, that are not part of the "two-mode" team. All these manufactures also have numerous big pickups and SUVs in their lineups.
I suspect that many of the manufacturers that are not part of the two-mode consortium will try to offer diesel engines as an alternative. Diesels work, of course, and they get about 30 percent better mileage than gasoline engines do. Some manufacturers offer diesels in their heavy-duty commercial models. The problem with diesels is that no one knows for sure how to pass America's tough future emission rules.
Ford was working with International Truck and Engine on a diesel for its full-size pickups, but then it killed the project four years ago. I can't say for sure what happened, but I heard it was adding too much cost, about $5,000 or so.
We do not know how much the two-mode system will add to the sticker price. These vehicles currently sticker from $30,000 past $50,000. A 25 percent economy increase on 20 mpg brings the mileage to 25 mpg. The auto companies need to figure out how much customers will pay for an improvement in 5 mpg.
These new hybrids are coming at a time when overall hybrid sales are softening. Toyota's Prius, a unique model, is a winner, but other hybrids, variations of today's cars like the Honda Accord and Ford Escape - have not had nearly as much success. All these vehicles add about 5 mpg but cost thousands more than equivalent non-hybrid models. The brand-new Toyota Camry hybrid and Nissan Altima hybrid (coming next year) will test the strength of the market for higher mileage hybrids (around 40 mpg).
I see four possible scenarios:
The new system is a sales success, and buyers flock to the GM and the Dodge products. Companies such as Ford, Toyota and Nissan see sales of light trucks sag badly.
The companies that do not have a two-mode hybrid system throw diesels into their vehicles, and then we have a dogfight of diesels versus hybrids.
Rather than fight, the outsiders scramble to license the two-mode hybrid system.
Customers will not care that much - about either two-stage hybrids or diesels - because they cannot justify the purchase premium relative to money they will save on fuel.Yet to be determined is how fast GM, DaimlerChrysler and BMW will be able to roll out the new hybrids or whether they will deliver the promised fuel economy in real-life driving. While I can't say for sure whether the new hybrids or diesels will save the gas guzzlers, it is hard to see Detroit surviving without them.
Jerry Flint - Forbes.com - July 11, 2006
http://www.cleanmpg.com/photos/data/501/Toyota_Sequoia2.jpg
Lower sales due to gas prices - Toyota Sequoia 4WD - EPA 15/17 mpg.
NEW YORK - Trucks, pickups and big sport utility vehicles are where the money has been for Detroit. That is how General Motors, Ford Motor and Chrysler have survived the onslaught in the passenger car market from the likes of Toyota Motor, Honda Motor, Hyundai and BMW.
Today, with gas prices at their current levels, the truck business - for both U.S. and foreign nameplates - is in serious trouble. In six months, Ford Expedition sales are down 33 percent; Dodge Durango sales, 37 percent; Chevy Avalanche sales, 45 percent; Nissan Armada, 23 percent; and Toyota Sequoia sales, 30 percent.
Don't give up on the auto industry, however.
Here is why. Starting a year from this fall, General Motors, working with DaimlerChrysler and BMW, will have a new hybrid system for their bigger vehicles. Unlike the gas-electric hybrids currently offered by Toyota, Honda and Ford, the new system - called two-mode - is suitable for towing heavy loads, something that owners often do with their bigger rigs. GM has said that it looks for 25 percent fuel savings compared with a conventional V8. Some of these savings come from a system already in place in some vehicles, such as the piston shutdown that runs the V8 engine on just four cylinders at cruising speed. But the promise is 25 percent fuel economy over a conventional vehicle that lacks the newer technologies.
GM will start putting the two-mode system in big SUVs like the Chevy Tahoe, Suburban and Cadillac Escalade. Pickup trucks will probably come later. The Dodge Durango is a likely candidate for initial availability in a Chrysler vehicle. BMW and Mercedes might be thinking of using the system in their luxury cars.
The car companies say they have optimized their new two-mode system for both city and highway driving, whereas optimal performance from hybrids currently on the market is only with city driving. The new design integrates proven automatic transmission technology with a hybrid-electric drive system. Among its features is the ability to operate with electric power only at low speeds and light loads.
My question is what happens to competitors - meaning Ford, Toyota and Nissan Motor, that are not part of the "two-mode" team. All these manufactures also have numerous big pickups and SUVs in their lineups.
I suspect that many of the manufacturers that are not part of the two-mode consortium will try to offer diesel engines as an alternative. Diesels work, of course, and they get about 30 percent better mileage than gasoline engines do. Some manufacturers offer diesels in their heavy-duty commercial models. The problem with diesels is that no one knows for sure how to pass America's tough future emission rules.
Ford was working with International Truck and Engine on a diesel for its full-size pickups, but then it killed the project four years ago. I can't say for sure what happened, but I heard it was adding too much cost, about $5,000 or so.
We do not know how much the two-mode system will add to the sticker price. These vehicles currently sticker from $30,000 past $50,000. A 25 percent economy increase on 20 mpg brings the mileage to 25 mpg. The auto companies need to figure out how much customers will pay for an improvement in 5 mpg.
These new hybrids are coming at a time when overall hybrid sales are softening. Toyota's Prius, a unique model, is a winner, but other hybrids, variations of today's cars like the Honda Accord and Ford Escape - have not had nearly as much success. All these vehicles add about 5 mpg but cost thousands more than equivalent non-hybrid models. The brand-new Toyota Camry hybrid and Nissan Altima hybrid (coming next year) will test the strength of the market for higher mileage hybrids (around 40 mpg).
I see four possible scenarios:
The new system is a sales success, and buyers flock to the GM and the Dodge products. Companies such as Ford, Toyota and Nissan see sales of light trucks sag badly.
The companies that do not have a two-mode hybrid system throw diesels into their vehicles, and then we have a dogfight of diesels versus hybrids.
Rather than fight, the outsiders scramble to license the two-mode hybrid system.
Customers will not care that much - about either two-stage hybrids or diesels - because they cannot justify the purchase premium relative to money they will save on fuel.Yet to be determined is how fast GM, DaimlerChrysler and BMW will be able to roll out the new hybrids or whether they will deliver the promised fuel economy in real-life driving. While I can't say for sure whether the new hybrids or diesels will save the gas guzzlers, it is hard to see Detroit surviving without them.