Impact of Hybrid Cars on the Automotive Industry

Impact of hybrid cars on the automotive industry is fundamental, and it has been estimated that within 20 to 40 years the majority of produced cars will be hybrids.

The first new generation mass market hybrid car in the U.S. was the Honda Insight, released in 1999.

At first, the hybrid cars seemed to have only a very marginal effect on the U.S. car market and car industry.

By 2004 the situation changed, fueled by several factors. The hybrid cars had advanced in technology, design, and comfort.

These advancements won the hybrid cars several awards, including 2004 Car of the Year Awards from Motor Trend Magazine and the North American Auto Show for the Toyota Prius II.

Another important factor favoring hybrid cars was the publicity gained by the many celebrities driving hybrid cars.

For example, celebrity hybrid car owners include Leonardo di Caprio, Kevin Bacon, Billy Crystal, Harrison Ford and Susan Sarandon.

Also, geeks started buying hybrid cars because Larry Page and Sergey Brin (founders of Google) drove a Toyota Prius.

Recent Impact of Hybrid Cars on the Automotive Industry

According to Prudential Equity Group analyst Michael Bruynesteyn, in 2004, the U.S. sales of hybrid cars jumped to about 80,000 vehicles in 2004, compared to the total global sales of just 43,000 hybrids in 2003.

Given this sudden and surprising surge in hybrid car popularity, most car manufacturers have now given "green" light on fast forwarding their plans on hybrid car production.

For example, GM, DaimlerChrysler, Nissan and Ford are now stepping up their plans to introduce new hybrid cars.

Long Term Impact of Hybrid Cars on the Automotive Industry

The trend is clearly away from traditional cars towards hybrid cars, which are more fuel efficient and environmentally friendly.

In fact, Toyota's research and development director Kazuo Okatmoto has estimated that in 20 or 40 years all Toyota's cars will be hybrids.

This trend is only strengthened by the selected state and federal tax breaks given by IRS for people who buy such cars.

However, there are competing technologies for hybrid cars.

For example, GM is in the process of developing hydrogen-powered fuel cells for cars and DaimlerChrysler is developing super-efficient diesel engines.

Of these, hydrogen-powered fuel cells in cars may still be 10 to 20 years from mass market production.


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