Aug 17, 2012
Hybrid market grows as budget-conscious consumers turn greenBack
Ford|Honda|Honda Motor Corporation|Honda Motor Southern Africa|Motors|Porsche|Porsche Centre South Africa|Toyota South Africa Motors|China|Japan|South Africa|United States|Electrical Energy|Energy|Hybrid Technology|Minimal Energy Waste|Motors|Oil Wells|Christo Kruger|Dave Pepler|Graham Eagle|Lettie Labuschagne|Motors|Ford Focus|Honda Insight|Honda Jazz|Prius|Toyota Auris|Toyota Corolla|Toyota Prius|Yaris|Environment-friendly Hybrid Technology|Improved Battery Technology
© Reuse this
This year’s newcomer is BMW, which joined the local ‘green’ gene pool with its ActiveHybrid 5, apparently the first of many models to follow from the German manu-facturer’s stable.
Hybrids, of course, promise better fuel consumption than other vehicles of their size – a sip from the Middle Eastern oil wells, rather than a gulp – as well as lower carbon emissions from the tailpipe. They do so through the use of two or more power sources.
Most hybrids are hybrid-electric vehicles, which means they house an internal com-bustion engine, as found on traditional vehicles, as well as an electric motor. It is this motor, coupled to a battery, that is left to do most of the grunt work in the slow, fuel-intensive, stop-start traffic city commuters often find themselves in.
Toyota South Africa Motors (TSAM) introduced the first hybrid to the local market in 2005 with the launch of the Prius. With consumers skittish to engage this new technology, the vehicle was first only available to lease, but this was soon changed to a purchase option.
In 2006, 204 hybrids were sold in South Africa – all Toyota Prius models, and then still the only model available locally.
However, jump ahead five years, and 627 hybrids were sold in 2011, with the biggest seller being the Honda Jazz at 166 units. By this time, Toyota, Honda, Porsche, and Toyota’s luxury brand, Lexus, all had hybrids available, says Honda Motor Southern Africa sales and marketing director Graham Eagle.
In total, Honda sold 339 hybrids in 2011, Toyota and Lexus 268 cumulatively, and Porsche 20.
This year, it looks as if South Africa may set a new record when it comes to hybrid sales. For the first six months of 2012, South African consumers bought more than 410 hybrids. Doubling that would see the market breach 800 units or more. This seems especially feasible since Toyota in July introduced the country’s lowest-cost hybrid in the form of a new Yaris derivative, which it hopes will sell between 20 and 25 units a month.
Consumers can currently choose between 14 hybrid models.
Interestingly enough, the pioneering Prius’s numbers are declining, down from 204 units in 2006 to 31 in 2011.
The most popular hybrids are the Honda Jazz and Toyota Auris, but Toyota may still upset the apple cart with its Yaris.
Why a Hybrid?
Then there is also his love for efficient, quiet driving, he notes.
Porsche Centre South Africa spokesperson Christo Kruger believes hybrid technology offers the “best of both worlds” – even for a brand historically known more for its agility than its frugality.
He says Porsche has been able to employ environment-friendly hybrid technology without compromising the sporty character of the German manufacturer’s cars, “resulting in a scintillating drive”.
“Smaller engine capacity, coupled with energy stored in batteries, produces excellent acceleration when required. Given adequate momentum, or in urban environments, the Porsche hybrid runs on battery power alone. Energy created by braking is converted and stored as electrical energy in the battery, for use when required, thereby making the car a more efficient unit, with minimal energy waste.”
Kruger says Porsche Centre South Africa has “experienced great success” with its hybrid models, particularly the Cayenne S.
“Porsche offers an in-car graph to measure the duration of driving time using battery power only, delighting drivers when they notice that up to 50% of their journey was completed with zero emissions.”
Hybrid Market Outlook
However, it must be noted that the Japanese government has been incentivising fuel-efficient vehicles to the tune of some $2 500 per vehicle in an effort to aid sagging domestic demand following last year’s earthquake and tsunami in that country.
But, then again, Prius sales also jumped 42% in the US in the first quarter of 2012.
Toyota, in Japan, also announced in May that it had sold four-million hybrids since the launch of the Prius, as its first hybrid model, in 1997. This came just 14 months after the three-million mark. Then also consider that it took ten years to hit the first million. This means the million marks are coming in quicker succession as hybrids gain traction in the minds of the motoring public.
Honda Motor Corporation said in January that it had sold 800 000 hybrids in total, 12 years and two months after the start of sales of the first-generation Honda Insight in November 1999.
Honda has since introduced six new hybrid models during the last three years to expand its hybrid line-up. The manu- facturer’s yearly worldwide hybrid sales were around 200 000 units in 2011, up 30% compared with 2010.
A research report by UK-based research firm Technavio predicts a 19% a year growth in global hybrid sales through to 2015, jumping from 900 000 units in 2011 to 1.8-million units in 2015.
China is seen as a market that holds much potential, with the hybrid market expected to expand at a compound annual growth rate of 41% from 2011 to 2015.
Technavio sees Toyota continuing its dominance in the global hybrid car market, owing largely to the product launches the company has scheduled in this segment over the next few years.
The research company also does not expect the hybrid to be overtaken soon by any other alternative power train.
“The hybrid vehicle will be the next big thing in the global automotive landscape and will not be overshadowed by battery electric vehicles,” the company says, in response to questions posed by Engineering News.
This overall positive trend could be in danger, however, as global fuel prices have been easing since the beginning of the year. Often hybrid sales are linked to major increases in the oil price.
Another threat to the long-term success of hybrid sales is that many vehicle manu-facturers have been focused on developing normal internal combustion engines capable of quite extraordinary savings in fuel consumption – without the added cost of a hybrid.
Unfortunately, hybrids still cost more than those powered by standard, internal combustion engines.
Technavio does expect, however, that the development of more efficient battery systems and their lower costs will cut the price of hybrids going forward, reducing this price gap. The report predicts that the total cost of ownership of hybrid vehicles will be less than for petrol-only vehicles by 2020, thanks to improved battery technology.
Never Expected High Volumes
“That said, we sell whatever we are able to bring into the country.”
She adds that Toyota has been able to make hybrid ownership more affordable locally, with the flagship Prius now offering a lot more kit as standard. The recent launch of the Yaris hybrid has also seen the unveiling of the country’s most affordable hybrid yet, at R223 800.
Aiding the affordability drive would be some kind of government incentive for consumers buying a vehicle that offers carbon dioxide (CO2) levels below the current 120 g/km threshold at which CO2 tax becomes payable, emphasises Labuschagne.
The Yaris hybrid promises CO2 emissions of 88 g/km.
“A change in this policy could result in more significant growth in the hybrid market.”
However, with the market as it currently stands, TSAM expects only stable growth going forward. This will be driven by hybrid technology becoming more familiar and trusted by South African consumers, and by more hybrid entrants being introduced, says Labuschagne.
Next up in TSAM’s hybrid line-up is a new entrant in the Lexus range, which could very well further expand the local company’s current 62% share in the hybrid market, already up from 43% in 2011.
“Hybrid technology is evolving rapidly, gaining increased support and buyer acceptance,” concurs Porsche’s Kruger. “Hybrids will, in my view, increase in numbers as public awareness and tech- nology develop.”
Honda may also still add to its local hybrid line-up, notes Eagle.
“At this time, Honda is evaluating the possibility of introducing the Honda NSX within the next three years. The two-seater sports car will feature a 3.5
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines
Other Automotive News
Updated 9 minutes ago Transnet National Ports Authority (TNPA) and the US Port of Miami are to collaborate on vital skills and training after signing a memorandum of understanding (MoU) in Cape Town. Delegations from the US and South Africa agreed that there were numerous opportunities to...
Updated 30 minutes ago Telecommunications group Telkom and South Africa’s second-largest mobile operator MTN on Friday entered into a heads of agreement, the conclusion of which would allow the duo to roam on each other’s network and enable Telkom to derisk its mobile unit. It would...
Updated 36 minutes ago The economic slowdown and significant tariff increases have weighed on consumers ability to pay for municipal services, leaving municipalities chasing debts of R93.3-billion by December. According to the National Treasury’s ‘Local government revenue and...
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...
The South African new vehicle market may well dip to 640 000 units in 2014, says Toyota South Africa Motors (TSAM) sales and marketing senior VP Calvyn Hamman. This is the first prediction that anticipates a drop in the market. To date economists and industry bodies...
Nissan will re-enter the South African minibus taxi industry in March, when the new NV350 Impendulo goes on sale. The 16-seater has been specifically tailored to meet the terms of government’s Taxi Recapitalisation Programme, which aims to replace South Africa’s...