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Green Technologies Face Rough Road in Down Economy

Industry analysts say most consumers are unwilling to pay the higher price for environmentally friendly vehicles, especially during a recession.

DETROIT – Global auto makers are spending considerable time and money developing green technologies, such as hybrid and full-electric vehicles, but the question is whether car buyers are willing to purchase environmentally friendly vehicles.

A panel of industry analysts at the SAE World Congress here says most consumers are unwilling to pay the higher price for such technologies, especially in a time of recession.

To sell green vehicles in today’s economic environment, it’s important to understand the thought process buyers go through before purchasing a vehicle, says Alexander Edwards, automotive president for the marketing firm Strategic Vision Inc.

The largest issue facing consumers, and the auto makers that want to sell to them, is a sense of uncertainty resulting from the down economy, he says. “You need to feel secure in your (purchasing) decision.”

A recent Strategic Vision survey finds car buyers seeking security are more comfortable with brands that have a reputation for reliability and quality. Tops on that list are Toyota and Honda.

“When you score high on reliability, you have a higher level of consideration,” Edwards says, noting durability is the second-most important consumer consideration. Fuel economy ranks higher during times of escalated gasoline prices but falls when the prices subside.

However, environmental friendliness barely registers on the survey, ranking 38 out of 55 purchase considerations. “People don’t want to sacrifice for green,” he says.

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Indeed, the survey reveals only 4%-6% of Americans are willing to pay extra or give up performance and features in order to purchase an environmentally friendly vehicle.

“When it comes to green, it’s somewhere in the middle of the consumer mindset. But if asked to give something up, it dips,” Edwards says. “Green, alone, won’t get you there.”

To market environmentally friendly vehicles, auto makers cannot rely solely on the “greenness factor.” Rather, that message has to be grouped with other favorable attributes, such as safety and quality. “Then consumers can make a ‘smart, green choice,’” he says.

Edwards cites the Toyota Prius as an example of how combining favorable attributes can help make green a selling point. “(The) Prius looks innovative and attractive. Some people are buying a Prius because it’s green, but that’s a very small percentage of the population.”

Scott Miller, CEO of market-research firm Synovate Motorearch, agrees with Edwards on some points but argues the environment is a growing concern worldwide.

“The world is becoming incredibly complex, and people are thinking there has to be more to life than chasing money,” he says. “Emotional motivation is more likely to drive people to a brand than rationale.”

A notable emotional motivation is the need for consumers to feel socially responsible. “Advanced powertrains are an indicator that (consumers) are doing the right thing,” Miller says, “and Toyota and Honda are winning that war.”

It’s also important for a business to have an environmental conscience. “There is a growing number of consumers who refuse to do business with companies that are not socially responsible,” he adds.

Yet, many car buyers are turning away from hybrids, Miller says, noting many are waiting for the next big technological breakthrough, such as plug-in hybrids.

“There is a lot of demand for plug-in (vehicles), but the batteries are not available,” he says. “Yet we’re telling consumers that plug-ins are right around the corner. We’re telling (them) to just wait. We should stop over promising.”

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