Increased Interest in Hybrids, Less Satisfaction to be Had Come From High Gas Prices

According to the latest two J.D. Powers surveys, consumers are showing an increased interest in hybrids, just as satisfaction in new cars is dropping because of higher fuel costs.

Before the estimated cost of hybrid technology is revealed, 72% of those surveyed said they were interested in hybrid technology. That's up from 58% in 2005. After telling them the added cost of a hybrid powertrain was $5,000, the percentage of interested consumers drops to 46%.

Which means that, even at a price premium of $5,000, almost half of those surveyed were still interested in a hybrid.

"High consumer interest in hybrid-electric powertrain technology may be reflective of not only rising gas prices but also a heightened effort among consumers to be more environmentally conscious," said Mike Marshall, director of automotive emerging technologies at J.D. Power and Associates. "Clean diesel technology, however, garners relatively low interest in comparison. One explanation for this may derive from a lack of education with the technology. Many consumers cannot differentiate between clean diesel and traditional diesel fuel—which in the past had a negative connotation with unpleasant vehicle emissions. As consumers become more educated in the benefits of clean diesel through increased product offers launching later this year, interest in the technology may increase."

J.D. Powers also surveyed new-vehicle owners satisfaction levels and for the first time in five years, the level has dropped (slightly). Mostly, new car owners are worried about fuel prices, making them a little more anxious about their new cars.

"Average prices at the fuel pump have increased by 27 percent in the period between the 2007 and 2008 APEAL studies, creating heightened sensitivity to fuel economy among new-vehicle owners," said David Sargent, vice president of automotive research at J.D. Power and Associates. "Even though more consumers are now achieving the gas mileage they expect compared with previous years, the increased cost of filling their vehicles still leads to a greater level of dissatisfaction with fuel economy than in the past. Manufacturers that deliver more fuel-efficient vehicles and integrate alternative fuel technology into their designs stand a better chance of delighting their customers and being successful in this rapidly changing marketplace."

All of which points to a different landscape for automakers. Even as the pricetags on new cars are continuing to increase (GM raised their prices an average of 3.5 percent for 2009 vehicles as Ghosn, CEO of Nissan, warns of higher steel prices for all manufacturers). Satisfaction levels, despite higher grades on reliability and initial quality, have dropped on new cars. Automakers are emphasizing fuel economy, even on the Dodge Ram. New CAFE rules, while having plenty of loopholes, shows a renewed interest in regulating the auto industry by Congress.

The landscape for cars is shifting rapidly.