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Hot Commodities on Both Coasts, Heartland Gets Few Hybrids



Source: : The New York Times, June 19, 2004
Situation
Hybrids are hot commodities on both coasts and in large urban areas where buyers wait 6-months
US made, large vehicles dominate heartland
50K hybrids sold in US last year of 17M total vehicles sold
100K sales expected this year as several new models become available
Current $1.5K tax deduction doesn’t cover incremental cost and being phased out
Ford Escape SUV, Lexus RX 330, Toyota Highlander SUV and Honda Accord hybrids all scheduled for release in next 9-months
Significant Points
Much of the hybrid popularity is dictated by how few Toyota and Honda make
Improved mpg comes during slow city traffic driving not on open road
Higher up front costs only offset by many city miles driven at high gas prices
$4k tax credit currently being considered would defray the typical added upfront cost of the vehicles
Environmental groups say hybrid technology will spread if given a serious chance by more automakers as volume goes up and costs come down
JD Power & Associates views upper limit for hybrid growth at just 3% of US market for the foreseeable future; other analysts see 10%+ potential