This entry, I'd like to cover the subject of 'Power Hybrids' - a piece to which I credit 3 cars as follows: The Lexus GS450h, the Honda Accord V6 Hybrid and the Toyota Highlander V6 Hybrid. Power Hybrids. What does it mean? Why are they here? What do we do with them? Do I know? Probably not. Still, lets have some fun and explore.
Let's not save the best for last. We will start with the Lexus. Is it muscle flexing? Or a sharp take on what luxury consumers are looking for? Rather than mull much over why its here we should really be glad it is. For many reasons of course but let's look at some starkly scientific ones through some raw facts. At first, when you compare this car to its closest non-hybrid version, the GS430, it does not look all that impressive. The GS450h improves mileage over the GS430 by around 6mpg or 29% to 27 mpg (avg of city/fwy) while other specs are pretty much comparable. Now take a look at it another way. The 2006 Mercedes S500 comes with a 302bhp engines which is 37bhp below the Lexus, its 0 - 60mph is around the same as the Lexus's boastful 5.2 seconds. The S500 is about 7 mpg worse on consumption and $32,000 higher on price. That's like the price of a low end luxury car. The BMW 750i by comparison does exceed in bhp over the Lexus coming in at 360 vs. 339, not a discernable impact, but of course it's going to be worse in efficiency by 6 mpg and higher again in price by $18,000. I know that luxury branding is another planet. Rich people spend money for their reasons. But while branding for the well-to-do, these premiere car makers have their own set of rivalries and being peoples of science, all the other car makers must be feeling the left-behind by Lexus who has produced a beauty of a package. The GS450h probably does not win over would-be buyers of the S500 or 750i as much as it does for the E350($55,700) or the 530i($49,700). Scientific prowess has a tremendous branding impact. If not directly in the luxury car market, it still propels the brand enough to ripple through all market segments. Think of it like a Mercedes S500 with the mileage of a Toyota Camry and priced attainable for the upper middle class if you really really really want it ($54,000). Such punches at the competition can spark wars. A good war. As a result, the electric portion in today's hybrid cars could well become a mass market thing. BMW has already announced that it will be launching a hydrogen vehicle in its 7 series class in 2007 (I am researching this right now and could be my next blog entry). And Honda will start leasing its fuel cell car to selected customers. As for Mercedes I have yet to get wind of anything exciting from them apart from branding some of their cars for the high end of the luxury market. The 2007 S class has 2 trims: the S600 and S65 priced at $140,000 and $180,000 respectively. Not respectfully.
The other cars I mentioned at the opening of this blog are the Honda Accord V6 Hybrid and the Toyota Highlander V6 Hybrid. Both cars are good works of science. 200bhp+. Almost 30 mpg. Here's the problem. At $30,000+ the name brands are venturing out of sphere into the low end luxury market. That is the reason why I think they both have suffered in sales units. In the Accord or highlander brand the correct business decision would have been to build hybrid versions of the Accord LX and the 4-cylinder Highlander that would approach 40 mpg. Like what Toyota did with the hybrid Camry. The Lexus is positioned better in that regard. It does not even demand a significant premium over the GS430 and like I said will win converts from high priced luxury models of competitors that have smaller bodies, bhp and mpg. Perhaps the thinking at Honda and Toyota is not get the sales bomb right with these cars. Perhaps it really is just making a statement. Psychological. Anyway, the Lexus seems to get in all the angles. I would predict that the Lexus GS450h will sell 50,000+ cars in its 1st 12 months in the United States alone compared to the 20,000 or so units the Accord Hybrid is expected to come in at in 2006.
Let's not save the best for last. We will start with the Lexus. Is it muscle flexing? Or a sharp take on what luxury consumers are looking for? Rather than mull much over why its here we should really be glad it is. For many reasons of course but let's look at some starkly scientific ones through some raw facts. At first, when you compare this car to its closest non-hybrid version, the GS430, it does not look all that impressive. The GS450h improves mileage over the GS430 by around 6mpg or 29% to 27 mpg (avg of city/fwy) while other specs are pretty much comparable. Now take a look at it another way. The 2006 Mercedes S500 comes with a 302bhp engines which is 37bhp below the Lexus, its 0 - 60mph is around the same as the Lexus's boastful 5.2 seconds. The S500 is about 7 mpg worse on consumption and $32,000 higher on price. That's like the price of a low end luxury car. The BMW 750i by comparison does exceed in bhp over the Lexus coming in at 360 vs. 339, not a discernable impact, but of course it's going to be worse in efficiency by 6 mpg and higher again in price by $18,000. I know that luxury branding is another planet. Rich people spend money for their reasons. But while branding for the well-to-do, these premiere car makers have their own set of rivalries and being peoples of science, all the other car makers must be feeling the left-behind by Lexus who has produced a beauty of a package. The GS450h probably does not win over would-be buyers of the S500 or 750i as much as it does for the E350($55,700) or the 530i($49,700). Scientific prowess has a tremendous branding impact. If not directly in the luxury car market, it still propels the brand enough to ripple through all market segments. Think of it like a Mercedes S500 with the mileage of a Toyota Camry and priced attainable for the upper middle class if you really really really want it ($54,000). Such punches at the competition can spark wars. A good war. As a result, the electric portion in today's hybrid cars could well become a mass market thing. BMW has already announced that it will be launching a hydrogen vehicle in its 7 series class in 2007 (I am researching this right now and could be my next blog entry). And Honda will start leasing its fuel cell car to selected customers. As for Mercedes I have yet to get wind of anything exciting from them apart from branding some of their cars for the high end of the luxury market. The 2007 S class has 2 trims: the S600 and S65 priced at $140,000 and $180,000 respectively. Not respectfully.
The other cars I mentioned at the opening of this blog are the Honda Accord V6 Hybrid and the Toyota Highlander V6 Hybrid. Both cars are good works of science. 200bhp+. Almost 30 mpg. Here's the problem. At $30,000+ the name brands are venturing out of sphere into the low end luxury market. That is the reason why I think they both have suffered in sales units. In the Accord or highlander brand the correct business decision would have been to build hybrid versions of the Accord LX and the 4-cylinder Highlander that would approach 40 mpg. Like what Toyota did with the hybrid Camry. The Lexus is positioned better in that regard. It does not even demand a significant premium over the GS430 and like I said will win converts from high priced luxury models of competitors that have smaller bodies, bhp and mpg. Perhaps the thinking at Honda and Toyota is not get the sales bomb right with these cars. Perhaps it really is just making a statement. Psychological. Anyway, the Lexus seems to get in all the angles. I would predict that the Lexus GS450h will sell 50,000+ cars in its 1st 12 months in the United States alone compared to the 20,000 or so units the Accord Hybrid is expected to come in at in 2006.
Good for Lexus, good for us.
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