Hybrids in U.S. Lose Appeal to Gas-Efficiency
By David Welch and Jeff Green - Jan 10, 2012
It’s a sign of the times when Cadillac is staking its comeback on a compact car that boasts fuel economy approaching 40 mpg.
Cadillac’s ATS sedan is one example of how carmakers at the Detroit auto show are putting new emphasis on small, powerful models with more fuel-efficient engines as sport-utility vehicles and even hybrids take a back seat.
General Motors Co. (GM)’s luxury brand brags that the ATS will run on a turbo-charged four-cylinder engine that kicks out 270 horsepower while still offering robust fuel economy.
At the same time, Ford Motor Co. (F) said it’s dropping plans for a hybrid version of its popular Escape SUV.
While past auto shows have been stocked with gas-electric hybrids and SUVs, slow hybrid sales have brought a dose of reality to the industry.
Carmakers are realizing they can give buyers what they want and avoid the expense of electric motors and batteries by shrinking cars and wringing better fuel economy from traditional gasoline engines.
“The advantages of hybrids are getting harder to justify,” said Scott Corwin, a vice president with consulting firm Booz & Co. in New York.
“It’s the cost differential. Consumers are rational and they understand the cost of ownership.”
Hybrid sales slowed last year to 2.2 < 2.11 >
percent of U.S. auto sales, from 2.4 percent in 2010, according to researcher LMC Automotive. -