Of Auto Shows and Chevy Tahoes

Hi all, it’s been a busy and interesting week for the auto industry. We’re right in the midst of Auto Show season, and our Clean Vehicles program director Jason Mark (a.k.a. “The Management”) was in Detroit to find out what was coming down the pike. He put together a very interesting analysis of the shape of the 2006 hybrid market that is well worth a read.

I’d like to expound just a bit on Jason’s point about the new Green Line Vue SUV, because to me it really typifies GM’s mishandling of the clean vehicle market. All along, GM has been badmouthing hybrid auto technology, often even their own. They nix a real hybrid Vue, then proceed to make some pretty great upgrades to the conventional version—enough to boost fuel economy by 20 percent, but the 36 volt battery system doesn’t have the kind of electric storage to warrant a hybrid label.

Think about if GM said, “We don’t think hybrids are the way to go just yet—we think more fuel can be saved and more emissions reduced right away if we first incorporate advanced conventional technologies more widely.” If they’d then put their money where their mouth was by incorporating this new technology into the entire Vue fleet, GM would have a real argument that they were doing the best thing by the planet. It could have been a very interesting counterpoint to use their strengths to counter Toyota and others investing heavily in hybrids.

“It couldn’t be done” you say? Well, GM just improved the fuel economy of their entire Tahoe SUV fleet by 12 percent over their last redesign in 2004. The gains would have been even more than that, but they also insisted on increasing the power and size of this already large and powerful model. Even with its increased size and power, however, the large Tahoe now bests the midsize Ford Explorer in fuel economy (note to Ford, time to dust off our Better SUV report)—an impressive step forward. Similar foresight could well have allowed GM to do the same thing with the Vue.

“Too expensive for the consumer” you say? Well, GM just reduced prices across its fleet by an average of $1,300 in order to try and get consumers to focus on the models themselves rather than special deals.

Saturn has always been sort of a “cult of personality” company among its consumers when it has worked its best—I can attest to that as a three-time Saturn buyer. Making the offer that, if you joined the new “Green” Vue family, you would be doing more for the planet (with over 90,000 Vues sold last year as a baseline) than if you bought the Escape Hybrid (about 16,000 sold in ’05), and for less money, it would be a compelling argument, to my mind. Instead, they have a small-production hollow hybrid that has less of a base cost, but will get far less mpg than the Escape Hybrid and less of a tax credit (we’re projecting $650 compared to the front wheel drive Escape Hybrid’s $2,600) to boot. With gas prices creeping back up toward the $2.50 mark, GM’s Green Line Vue strategy rings, well, pretty hollow.

Posted by: ScottN

Comments

[Mark Wiener]

It appears to me that GM's real interest is in promoting flex fuel and E85 vehicles and moving most of their production to less expensive Latin America. While they lay off North American workers, they keep an eye on South America for ethanol.

Perhaps at least science minded individuals will connect the dots between natural gas, Dubai running USA ports, methane to ammonia fertilizer to heat for distillation of moldy corn mash from drought struck Mid West corn not suitable for animal feed to estrogen mimics and pollution and public health. Second wave of massive consumption will be directed towards synthetic liquid fuels and gas from coal, Hydrogen from coal, pressurization of failing Saudi oilfields with coal derived CO2 and hopes the toxic CO from the new plants does not leak! And by the way, mountain top removal turns West Virginia into a polluted mesa!