Will hybrid technology be savior for SUVs?

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Thursday, February 7, 2008
— What is it that’s driving auto executives’ optimism that U.S. sales will improve in the second half of this year?

In a broad sense, it’s a promised federal stimulus package and lower interest rates expected to boost confidence and send consumers to dealer showrooms.

But more specifically, at least from General Motors’ perspective, it’s all about product, they said Wednesday at a media preview of the 100th Chicago Auto Show.

Much of GM’s attention Wednesday was directed at the new two-mode hybrid Chevrolet Tahoes and GMC Yukons that will hit showrooms soon. The automaker will launch a hybrid Cadillac Escalade later this year.

“We really think that this hybrid technology will be a boost for the segment,” said Mark LaNeve, GM’s North American sales leader.

“We’ve got so much interest in this hybrid system that we’re just trying to figure out how to get more availability of the components.”

With GM’s hybrid system, electric power propels the vehicle up to about 30 mph, when gasoline takes over. The result, GM says, is a significant improvement in fuel economy.

“The Tahoe hybrid gets better city fuel economy than a four-cylinder (Toyota) Camry,” LaNeve said. “That’s amazing when you think about a vehicle that big with that much capability.”

In the national fuel economy debate, LaNeve said, there’s a misconception that all Americans want to drive “tiny little fuel efficient cars.”

Through focus groups, GM has learned that consumers want plenty of room, decent towing capacity, off-road capability and high seating that provides excellent visibility.

And they want fuel economy of 20 miles per gallon or better, LaNeve said.

“What they’re describing is the Tahoe hybrid, and we think there will be a market for that type of vehicle for a long time,” he said.

While the GM plant in Janesville builds Chevy Suburbans and Tahoes and GMC Yukon XLs and Yukons, none of the local products are hybrids.

Those all are built at Janesville’s sister plant in Arlington, Texas. GM officials said Wednesday they weren’t sure why Arlington got the hybrid work, but popular assumptions centered on the fact that Arlington also builds the Escalade, which will debut a hybrid version this fall.

“It certainly wasn’t done to slight anyone in Janesville,” said Ed Peper, GM’s brand manager for Chevrolet.

LaNeve said that if demand for the hybrids skyrockets, Janesville might see some of that production.

LaNeve also said GM expects to see growth in the full-size SUV segment in the commercial people-moving business.

“When you go to Manhattan, you don’t see many Lincoln Town Cars anymore,” he said. “You see Cadillac Escalades, and I think you’ll see Suburbans, Tahoes and Yukons become much more of a commercial player for moving people, especially as we continue to develop fuel efficiency technologies.”

So, will the segment return to its peak, when nearly 1 million full-size SUVs were sold annually?

“Probably not,” LaNeve said, “but we think it will be a real steady segment for us.

“It’s a very profitable segment for us and our dealers, and we plan on staying in it and investing in it.”

Last updated: 5:15 pm Thursday, December 13, 2012

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