Audi worries about demand for hybrids ~ Hybrid Car Review
Hybrid Car Review: Audi worries about demand for hybrids

Wednesday, October 11, 2006

Audi worries about demand for hybrids

In the article from Reuters, Marius Lehna, project manager for the hybrid Audi Q7 sport utility vehicle, warns that greater demand of hybrid vehicles must come from the US.

The US is the largest consumer of automobiles in the world. And with 70 percent of the hybrid vehicles sold worldwide being sold in the US (21 percent in Japan), the demand for hybrids is being driven by the US market.

But the demand isn't high enough to justify the complexity of building and selling these cars. It seems (reading between the lines in the comments from Marius) that a bottom limit of 15,000 units per year need to be sold to justify the extra costs. But, at the moment, the younger crowd can't get into the market in large numbers.

Of course, that's becuase the cost is too high for the younger market (in my opinion) to enter. Its going to take a reduction in price to get them 'energized.' But, of course, in order for the cost to come down, more hybrid cars need to be manufactured.

But Marius seems to be missing part of the story. Toyota seems to be willing to pay the initial cost of investment into this industry and has already received some of the dividends. Audi and other carmakers whoc choose not to enter the hybrid market, won't be able to take advantage of the goodwill from consumers (and the loyalty that comes with it).

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