Tuesday, April 10, 2012

Two-thirds of hybrid owners opt for a standard gas vehicle for their next car

A new study by R.L. Polk casts a shadow on the moves of automakers to increase their hybrid and electric vehicle fleets. According to the survey, nearly two of three hybrid owners go back to a more conventional automobile when it's time to get a new one.

Brad Smith, director of Polk’s Loyalty Management Practice said, "Having a hybrid in the product lineup can certainly give a brand a competitive edge when it comes to attracting new customers. The repurchase rates of hybrid vehicles are an indication that consumers are continuing to seek alternative solutions to high fuel prices."

In other words, after living with a hybrid, consumers - or at least the majority of them - are not convinced it's the way to go to solve the problem of high fuel costs.

According to R.L. Polk's data, only 35 percent of hybrid vehicle owners purchased another gas-electric hybrid model when they traded in their current vehicle during 2011.

Toyota should be (somewhat) proud of their statistics. The company had the highest customer loyalty, but it was still below 50 percent. The Prius is the world's most popular gas-electric hybrid, and 41 percent bought another hybrid, either from Toyota or some other manufacturer. Still, that means 3 out of 5 Prius owners eschewed a new hybrid.

Meanwhile, less than 20 percent of Honda hybrid owners purchased another gas-electric vehicle. Considering the fact that there was a class-action lawsuit over mileage claims for the hybrid Civic, it's not surprising.

Polk came to the conclusion (which really wasn't difficult) that the higher cost of hybrids has a negative affect on both loyalty and original purchases. None of that should be a surprise; analysts have determined that it can take as long as seven to 10 years to recover the additional cost of the hybrid itself through fuel savings.

In fact, in some areas, like California, quite a few Prius buyers cited the ability to get into the HOV lane as the main reason they purchased the car. The same happened with the pre-orders for the Prius Plug-in; dealers we spoke to in California said that nearly all, if not all, of their pre-orders cited re-entry into the HOV lane as the reason they rushed to buy the car.

That said, hybrid sales have improved when gas prices soard. The peak of hybrid sales as a percentage of overall sales came in 2008, the year gasoline hit its all-time record price. In 2011, sales slipped to 2.4 percent.

However, in March, there was a huge surge in Prius sales, as prices surged again. Overall, though, automakers are improving their fuel economy across the board, and when taking the high cost of a hybrid into account, it's hard to justify buying one versus, for example, a regular old Hyundai (the company boasts of five different models which now get over 40 MPG ighway).

Lacey Plache, Edmunds.com chief economist said it well: “The lineup of alternate-drive vehicles and their premium price points just aren’t appealing enough to consumers to give the segment the momentum it once anticipated, especially given the growing strength of fuel economy among compact and midsize competitors."

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