The Car and Truck Fleet and Leasing Management Magazine

J.D. Power Report Identifies Most Environmentally Friendly Models

September 01, 2006

WESTLAKE VILLAGE, Calif. --- In J.D. Power and Associates' newly released "Alternative Powertrain Study," Honda, Toyota, Ford and Volkswagen land the most vehicles at the top of the automotive environmental index. Fifteen out of 37 automotive brands are represented in the report's top 30 list of environmentally friendly vehicles. All new for 2006, the Alternative Powertrain Study (APS) includes the Automotive Environmental Index (AEI), which combines U.S. Environmental Protection Agency (EPA) publicly available information with voice-of-the-customer data related to fuel economy, air pollution and greenhouse gases for 2006 model-year vehicles. Voice-of-the-customer data is also used to help determine the relative importance of these environmental factors. The fuel economy factor represents approximately 50 percent of the index, while air pollution and greenhouse gases contribute to the remainder. Among the top 30 AEI vehicles, eight are hybrids: the Ford Escape, Honda Accord Hybrid, Honda Civic Hybrid, Honda Insight, Lexus RX 400H, Mercury Mariner Hybrid, Toyota Highlander Hybrid and Toyota Prius. Traditional gasoline-powered models in the top 30 are: Acura RSX, Chevrolet Aveo, Chevrolet Cobalt, Ford Focus, Ford Focus Station Wagon, Honda Accord, Honda Civic, Hyundai Accent, Hyundai Elantra, Kia Rio, Kia Spectra, Mazda3, Mazda MX-5, Nissan Sentra, Saturn Ion, Scion xA, Suzuki Reno, Toyota Camry, Toyota Corolla, Volkswagen Golf, Volkswagen Jetta and Volkswagen New Beetle. Hybrid SUVs are the only truck models among the top 30. Only two luxury models -- the Lexus RX400H and Acura RSX -- are included among the top environmentally friendly vehicles. Volkswagen ranks highest among nameplates in the Automotive Environmental Index, with three models in the top 30. While there are no diesels within the top 30, several diesel models from Volkswagen also perform well, which is reflected in VW's strong overall nameplate performance. VW is followed in the nameplate rankings by Honda and Mazda, respectively. "High gas prices, coupled with consumers becoming more familiar with alternative powertrain technology, are definitely increasing consumer interest in hybrids and flexible fuels," said Mike Marshall, director of automotive emerging technologies at J.D. Power and Associates. "However, the additional price premiums associated with hybrid vehicles, which can run from $3,000 to $10,000 more than a comparable non-hybrid vehicle, remain the biggest concern among consumers considering a hybrid. The AEI highlights several non-hybrid models available that help consumers reduce fuel use and emissions." The study, which examines consumer perceptions regarding hybrids, diesel and flexible fuel vehicles, finds that fewer than one-fourth (23%) of consumers say they will only consider a gasoline-powered model for their next new vehicle. Among consumers who expect to acquire a new vehicle within the next two years, 57 percent indicate that they are considering a hybrid vehicle, while 49 percent are considering a flexible fuel (E85 ethanol-based fuel blend) vehicle and 12 percent a diesel. On average, consumers considering a hybrid expect to pay approximately $5,250 more for the powertrain option. Acknowledging the increased vehicle price, these consumers expect an average fuel economy improvement of 28 miles per gallon compared to a similar vehicle powered by a gasoline internal combustion engine, when in reality, hybrid owners report getting an average improvement of just 9 mpg. Consumers considering a diesel expect to pay approximately $2,800 more for the option and expect an average fuel economy improvement of 21 mpg, while diesel owners report getting a 12 mpg improvement on average. Those considering an E85 vehicle are unsure whether to expect to pay more for the option or see an improvement in fuel economy, but instead hope the use of the ethanol-based fuel blend will help reduce U.S. dependency on foreign fuels. The availability of fuel or fueling stations is the largest concern among consumers considering a flexible fuel or diesel-powered vehicle. "One of the biggest challenges for alternative powertrains is that consumers often have unrealistic expectations for the fuel-saving abilities of these vehicles," Marshall said. "And particularly with hybrids, actual fuel performance often doesn't live up to the vehicle's EPA estimate. There is a real need to educate consumers about the technology and its benefits. Managing consumer expectations and lowering the cost premium will be instrumental in accelerating acceptance." Despite often providing lower-than-expected gas mileage performance, hybrid and diesel U.S. market share continue to grow. J.D. Power and Associates forecasts that hybrid vehicles, which represented 1.2 percent of the U.S. new light-vehicle market in 2005, are expected to increase to 1.6 percent in 2006 and 5 percent by 2013. Diesel vehicles, which represented 3.2 percent of the U.S. new light-vehicle market in 2005, are expected to increase to 3.6 percent in 2006 and 9 percent by 2013. The 2006 Alternative Powertrain Study includes responses from more than 4,000 consumers who plan to purchase a new vehicle within the next two years. Respondents were surveyed in July 2006. The voice-of-the-customer components of the Automotive Environmental Index are derived from both the 2006 Alternative Powertrain Study and the 2006 Automotive Performance, Execution and Layout (APEAL) Study. The more than 63,000 respondents to the 2006 APEAL Study were surveyed between February and May 2006. Comprehensive environmental ratings for 2006 models can be found on the J.D. Power Consumer Center at
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