Technology isn't enough for building segments

Is there a segment in the automotive industry that can be named environmental cars? I would argue no, there isn't.

A segment, by definition, is a group of customers who share the same needs and values and can be expected to react in the same way to the company's offer. And I find it interestingly that the reasons why people are buying different kind of environmental cars differ a lot.

Let's take the Toyota Prius. It's a pretty small car that retails for more than $ 21,000, some 3 - 5,000 dollars  up on a similar vehicle without Toyotas famous hybrid technology. Of course, doing your math will show that you pretty soon have ended up with a positive result as you don't have to fill it up that often anymore. According to dealers though, the main reason for buying the Prius is a good social and environmental conscience. And the people buying them can afford to be councious, the median household income for men buying the Prius is $98,000 and $89,000 for women. Eighty per cent of them have a college degree.

Saving money isn't the first job the car has to live up to.

On the other hand if you look at vehicles with bi-fuel technology(combination of petrol gas and methane), most common in Europe with a lot of models from Opel, Volkswagen, Mercedes and Volvo, suddenly price is important. The difference in price which more or less is the same as for the Prius is lower in relation to the total cost, as European cars sells for about double the price in the US.

Driving a bi-fuel car is considerable cheaper than an ordinary vehicle. In some countries about half the price compared to other fuels. And because of an enormous taxation of fuel in all EU countries (more than 80 per cent of the total price) every cut is welcome.

Apparently people in Europe seems to buy bi-fuel because of the price. At least is that the assumption from people in the know. It's all about economy, according to manufacturers as well as  public envangelists. The conclusion is that two different technologies that basically leads to similar results - lower cost of fuel and less contribution of CO2 represent two different kind of buying behaviors.

Why? I think the answer is to be found in the level of intervention of your ordinary life. Similar to the situation in California, methane isn't especially easy to find in Europe. One could argue their are a lot of methane gas outlets covering wide geographical areas, but compared to other fuels there's not.

A clearer conscience is worth $5,000 if you can afford it. But paying with your time and convenience is not an option, not to that relative high number of people in the US who actually bought a Prius.

On the other hand you don't buy a Prius if you want to save money. You would better buy a Corolla for less than two thirds of the price and still find that the gas meter isn't too tough on you. But if you would like a bigger car, especially in Europe when gas prices are record high, you actually would consider to take some extra time to find new kind of gas stations, eventhough you have to drive through dark and empty industrial areas.

So the result:

Hybrid vehicles - people with plenty of money wanting a clearer conscience
Bifuel cars . people wanting a better fuel economy

Not the same people. Not the same segment. There is no such thing as an environmantal vehicle market.

By the way, if you would like to found out more about cars on alternative fuels - visit Green Car Congress