Interesting article (if not entirely factually correct) about "bourgeois bohemians", or 'bobos', and how they tend to set styles / trends. Supposedly, they're the driving force behind hybrid waiting lists...and here I thought it was the rising price of gas / lessened emissions...

http://money.cnn.com/2005/03/04/pf/g...obos/index.htm

Now, if you'll excuse me, I'm off to get my double mocha half-soy half-skim latte...

 

The article is only HALF RIGHT when it says "Bobos drive sensible but expensive vehicles" because Priuses and Civic Hybrids and Insights, while indeed sensible are definitely NOT "expensive vehicles."

I'm not a "bobo" (maybe a boob sometimes ) and I am helping to make Hybrids popular by promoting them every chance I get.

 

The top sellers (Civic/Prius) are definitely affordable, but the newer entrants such as the Escape, Accord, and Lexus 400h keep pushing the price envelope higher and higher. Each model is expensive in the sense that you could get a gasoline-only equivilent car for less money up front, I guess.

 

Yes, they are increasing the "average Hybrid price" but remember: "EXPENSIVE" is SUCH a relative term.

A car one family might consider "too expensive" can be easily afforded by the family down the street, usually.

My thoughts are this: If you can "comfortably afford" the gas version of a car, you can also "comfortably afford" to spend the $3K more for the Hybrid.

I say "comfortably afford" because if you are STRETCHING your budget to the edge buying a $28K gas version of an Escape, then you should not be buying it. If you can afford it and still have "wiggle room" in your family budget, then you can usually afford to "wiggle" up to the Hybrid version.

Does that make sense to anyone but me?

 

I'd agree to a point - it might not be a stretch for the $28K sticker (which, being a non-hybrid, and a domestic to boot (using our Ford Escape as an example), could probably be negotiated downward by $2000, without much trouble). So, now, you have an assumed $5000 delta between the two.

Since 80% of people finance their cars, let's use that assumption. If we take a rate of $17.50 / $1000 financed (I don't know off the top of my head what interest rate / term that would equate to, but I often see it in ads), that's an extra $87.50 /mo added to the payment. Which might then start making it a stretch for that buyer.

At that point, the potential buyer thinks - "will I save that much or even close to it in gas each month ?", and tries to cost-justify it. Which we know at this point, can't be objectively done on a pure cost basis - there currently has to be a subjective decision ("it'll pollute less", "I care", "I expect gas to go > $3 / gal", etc.) for the buyer to spring for the hybrid vehicle, over its non-hybrid counterpart. And we're not even talking dealer-added *markup* on the hybrid car yet, as we see in some states (SoCal, for example).

I think the reason you see manufacturers adding it to the most expensive trim lines in a car (Honda), or to the SUVs (Toyota, Ford), is because of the higher profit margin inherent in those models. The margin helps 'absorb' some of the manufacturer's cost, if you will (and yes, I'm suggesting that they're still 'subsidizing' the technology, to some extent). Similar to how convenience / safety items get added to product lines - you see it in the Caddy first, then down to the Buick, and in a few years, even the Chevy gets it

I also think that the first people buying hybrids ('early adopters', in marketing terms) were always interested in FE - so they're more willing to get into a smaller car, a less powerful car, a more spartan car, etc. Thus, your initial target market expects a smaller, cheaper vehicle. It's only now, after the technology has been out for a few years, that the market can now be expanded 'to the masses'. And 'the masses' want a larger, more utilitarian vehicle. Now it's time to see if they'll pay for it.

Toyota gets the credit for 'breaking the mold' and expanding from the 'small car' model with the 2nd-gen Prius. But I wonder if they realized that they'd never break even with the 1st-gen design (through increased volumes), due to how small the car was (there's someone where I work with a 1st-gen Prius, so I can see for myself the radical change between 1st- and 2nd-gen ). Since the greater part of that $1 billion R&D cost was probably already committed / spent, they had to roll dice, and it paid off. Just my opinion.

 

That article sure is funny, however I don't believe that I fit the example of a bobo either. I've never been much into vacations, especially exotic ones. I'd like to take a cruise, but that isn't going to happen for a while, and that certainly isn't exotic. I am not affluent, although I hope to be one day. And I don't like my coffee adulterated by soy milk, let alone much else.

I think my sig line best describes a great number of hybrid owners. I am techie and cheepie. But considering what you get when you purchase a Prius, it is a fair price for the overall package. I don't feel like Toyota is charging me a significant hybrid premium for the vehicle.

I saw the Prius as a very sensible vehicle without being stodgy.