Fuelling consumers’ desire for the eco-car

Persuading drivers to buy alternative-fuel cars will be tough for an industry used to luring consumers with images of power and speed. By John Stones

Imagine a car that instead of belching out toxic fumes harmlessly converts its waste into water vapour. Or a vehicle powered by wood chips, or even sewage.

These are not fantasies of a brave new green world, but realities that the major car manufacturers are being forced to look into by governments around the world keen to reduce carbon dioxide emissions. Car manufacturers have chosen to invest the bulk of their money and effort in developing hydrogen-powered cars that emit only water. As a result, many industry experts believe this form of car will come to dominate the world’s roads within the next ten to 15 years.

The California Air Resources Board has already decreed that in two years’ time two per cent of new cars sold in the state must have zero emissions, and another eight per cent ultra-low emissions. The European Union, by contrast, has a rolling programme to continue tightening the rules on vehicle emissions and force manufacturers to introduce cleaner cars.

In addition to developing the necessary technology, car makers have the difficult task of persuading drivers to give up their powerful and responsive petrol- or diesel-powered cars. An interim solution is hybrid cars, which rely partly on electric power generated by the vehicle’s petrol engine or braking motion. Already these eco-friendly cars have caught people’s imagination in the US where some of California’s most glamorous residents – Leonardo di Caprio, Harrison Ford and Cameron Diaz included – are driving the eco-friendly Toyota Prius.

Toyota is launching the Prius in the UK in January with a sales target of between 1,500 and 2,500 units in its first year, rising to 5,000 a year thereafter. The manufacturer had sold a previous eco-friendly model in the UK but only in tiny amounts. In the US, Toyota sold 10,000 Prius cars in the first month of launch, tapping into consumers’ desire to be seen as ecologically engaged and technically savvy. And Toyota UK commercial director Paul Philpot believes: “There is the same opportunity in the UK as in the US to make the statement.”

But it is the technology that is likely to prove difficult to sell to UK drivers. A spokesman for Honda, which has just launched a second-generation hybrid car, the Civic IMA (Integrated Motor Assist) says: “The dilemma we face is the British distrust of anything new or technical. We still get asked if our IMA cars need to be ‘plugged in’ overnight.”

To Honda’s frustration, its recent “Happy Braking” poster campaign, attempting to explain the technology behind the Civic IMA in a humorous manner, attracted complaints to the Advertising Standards Authority. The ads were accused of encouraging speeding and Honda has since withdrawn them. Despite this setback, Honda has sold 500 Civic IMAs since May – twice as many as it forecast.

However, General Motors vice-president of research and development Larry Burns says zero-emission fuel cell cars will eventually make petrol-electrical hybrids obsolete. The company has spent $1bn (£600m) on developing fuel cells to power electric motors.

The UK Government and regional bodies are helping to make eco-friendly cars, such as those manufactured by Honda and Toyota, more attractive to consumers by making drivers of them eligible for a £1,000 “Powershift” grant, exemption from the congestion charge, and free parking in Westminster.

But not all are impressed by these eco-friendly vehicles. Professor Garel Rhys, of the Institute of Automotive Industry Research at Cardiff Business School, says: “They are essentially a blind alley that allow manufacturers to show willing, to show that they care and understand environmental concerns.”

Rhys suggests prestige manufacturers face the biggest brand challenges from alternative fuels. “Imagine a BMW powered by fuel cells – it’s a difficult marketing task and bad for its image.” Yet BMW has promised that a hydrogen-powered 7 Series will be put on sale within five years. It has developed a prototype and has chosen to take the route of liquid hydrogen with an internal combustion engine, rather than the more futuristic hydrogen fuel cells, which although theoretically more efficient are more expensive to develop.

Buses are likely to be the first hydrogen-powered vehicles to be regularly seen on the road, as they will not need a refuelling infrastructure outside depots. This is just as well, as plans to build a BP hydrogen filling station in Essex, part of an EU-sponsored scheme designed to show the viability of hydrogen, have been turned down by the local planning authority.

The most common alternative fuel at the moment is liquefied petroleum gas (LPG), which is provided by many petrol stations. But the technology behind it is seen by many as having been superseded, and the Government is rumoured to be reconsidering the fiscal incentives for LPG.

Once technology is shown to have a proven ecological track record as well as offering economic benefits, the UK population may be persuaded to take it up. Diesel cars, for example, have improved their efficiency and as a result their popularity has increased. In 2002 they accounted for 23.5 per cent of new cars sold in the UK – nearly twice as many as in 1992, according to the Society of Motor Manufacturers and Traders.

But there are limits to how efficient technology can make fuel consumption and emissions. Nick Matthews, principal fellow at Warwick Manufacturing Group at the University of Warwick, says some cars on sale in Europe are now almost as efficient as it is theoretically possible to make them. He says: “Ironically, if cars in the US were as efficient as those in the EU, they wouldn’t need any Arab oil.”

To produce even more efficient cars, manufacturers have no choice but to investigate fuel alternatives. This, says Global Insight analyst Vic Barodia, can ultimately confer a marketing advantage in the form of a “halo effect on the brand”. However, the jury is still out on that.

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