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FULL ARTICLE | EDITORIAL 
High price to pay to attract green vote 
Peter Schmidt | Editor

Published: Fri, 19th May 2017 14:27:29 GMT
 

I heart hybrids Germany Berlin


Open quote signConsumers’ love affair with the motor car has rarely been rational. How else could we explain today’s worldwide craze for SUV-Crossovers? 

Perplexing, despite the return to a cheap fuel era and a similar headlong rush into Crossovers in Europe, consumers’ fuel-economy considerations still appear deeply rooted in the minds of European motorists. 

Perhaps less so in the US, where fuel prices were always just a mere fraction of what they were on this side of the Atlantic. 

One likely reason for the continued fuel economy concerns, Europe’s motorists probably believe that today’s cheap fuel era will not last. 

Meanwhile, Europe’s diesel car bubble has burst. 

It suggests that hordes of Europe’s deeply concerned and now seriously anxious diesel car owners - wary of discriminatory future measures such as inner city bans for some diesels - are now on the lookout for the next best non-diesel alternative. 

Sensing a big opportunity in Europe, Toyota started a charm offensive with its previously slow-selling hybrids.

It hardly comes as a surprise that Toyota’s hybrids are suddenly getting a second look from European motorists. 

That’s chiefly because hybrids were always seen as a means to save fuel. 

But unlike North America, here in Europe that role was already perfectly played by diesels, which, compared to most petrol powered cars offer real-world fuel economy savings of up to 30 per cent. 

Add to that their sparkling performance, together with the slightly lower pump price of diesel fuel, and it’s crystal-clear why traditionally Europeans were underwhelmed by the ‘paper benefits’ of Toyota’s petrol-electric hybrids.

Despite an average 10 per cent or so price premium, half of Europe’s new car buyers opted instead for these notably pricier diesel-powered cars. 

So much for the past. 

While opting for Crossovers in droves, European motorists have not only retained their fuel-economy concerns, they also want good value for money.

As a group, they are reluctant to pay over the odds. 

Aside from a small tree-hugging minority, given today’s still pricey electric cars or plug-in hybrids, today Joe Public will simply refuse to purchase or lease such a vehicle. 

That’s apart from today’s sparse public electric recharging network in most European countries. 

Toyota thinkers are right for believing that hordes of Europe’s disillusioned diesel car owners are now on the look-out for a suitable alternative. 

Perhaps, a more future-proof petrol fuelled car with at least some of the fuel-economy virtues of diesels. 

That’s fine in principle, were it not for Toyota’s price premiums. 

As today’s German market illustrates, thanks to Toyota’s self-funded €3,000 hybrid subsidy, some of Germany’s bargain hunters are willing to bite. 

So far so good. 

The problem is however that Toyota’s hybrids, because of their added technological sophistication, such as the extra battery pack and E-motor, are simply more expensive to produce. 

For Toyota the good news is that in the four months to April this year it stands out as one of the biggest notable gainers in Western Europe. 

The not so good news for Toyota is that one of the world’s most profitable mass market carmakers has lost some €526m from its first quarter car business in Europe. 

That translates into an eye-watering €2,200 loss for every car it sold in Europe this first quarter and probably a great deal more for every one of its discounted hybrids
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