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Obama, Car-Market Clairvoyant



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Detroit — In rolling out its plan for the future of Chrysler on Wednesday, Fiat executives dutifully stressed that the “New Chrysler” would be more fuel efficient — hailing the tiny, 40 mpg, Euro-transplant Fiat 500 as a marquee car. After all, a precondition for Fiat’s no-money-down takeover of the ailing automaker was that it conform to President Obama’s prophecy for the auto industry.

“Fiat has demonstrated that it can build the clean, fuel-efficient cars that are the future of the industry,” announced the soothsayer-in-chief last April, upon handing Chrysler’s keys to the Italians.

Coincidentally, October sales figures came out the same day this week that Fiat laid out its Chrysler plan, and greens were cheered by the fact that hybrid sales climbed to 2.9 percent of market share — nearly where they were two summers ago when gas prices hit $4 a gallon.

But a closer look at the numbers raises more questions about whether more expensive hybrids and diesels will ever be more than a niche U.S. market — rather than the norm predicted by the president (a prediction mandated by his 35.5 mpg requirements by 2015).

Dozens of new hybrid entries have flooded the market in the last two years, but as the Toyota Prius goes — so goes the hybrid market. The Prius (sales up 14 percent last month) still dominates the sector with a 55 percent market share.

Both Honda (the Insight) and Ford (Fusion Hybrid) have brought impressive entries to market this year, wallpapering the airwaves with green marketing. Both products have been a disappointment. The Prius outsells the Insight by an 8:1 margin. “Honda’s Insight is a sales dud,” writes Paul Niedermeyer of Green Car Congress, “only modestly improving on last year’s Civic hybrid numbers. The Civic Hybrid (down 85 percent) is becoming irrelevant.”

For its part, the Fusion Hybrid — targeted at Toyota’s mid-size Camry Hybrid — only seems to be stealing Camry sales rather than expanding the market. Camry Hybrid sales were down a staggering 50 percent in October. Furthermore, the Fusion seems to be stealing from its own nest as its SUV cousin — the Ford Escape Hybrid — saw sales drop 53 percent.

All of this continues to raise “the question as to whether Ford’s hybrid program is anything other than a PR/EPA/Govt. fleet sales gambit, with volumes limited purposely because Ford’s hybrid costs likely exceed incremental revenue,” concludes Niedermeyere.

It also raises the question as to whether President Obama has any idea what he’s talking about.



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