The September 3rd issue of Newsweek magazine carries an article on the Honda and Toyota hybrid vehicles. It contains some interesting revelations. According to Newsweek, the primary reason that the Prius has outsold, by far, the Honda hybrid vehicles is political. It seems that people who buy the Prius buy it because they believe it makes a political statement.
Though Honda was first to the market with a hybrid, the Insight, when it prepared its next generation of hybrid vehicles, the company viewed them as a drivetrain, not a separate type of vehicle. Hence, Honda made the Civic available with a hybrid drivetrain option, as it did with the Accord and even the Prelude. In outward appearance, the hybrid Hondas were distinguished from conventionally powered Hondas only by small exterior badges.
Toyota, on the other hand, created an entire new vehicle around the hybrid concept, the Prius. The Prius looked different than other Toyotas. It was immediately recognizable as a hybrid. That, it turns out, was its chief marketing advantage.
When the environmentalist bought a Honda hybrid, no one noticed. But when the environmentalist bought a Prius, every one knew he or she cared about conserving and taking care of the planet. Newsweek even interviewed a man who traded his Honda hybrid for a Prius for precisely that reason: when he drove a Honda, no one noticed that he was driving a hybrid. He traded for a Prius and is now delighted. People stop him and congratulate him for driving a hybrid.
Toyota, it turns out, has tapped into a market of people who want to be noticed, who want to separate themselves from others, and who want to think they are better than others. Of course, status and prestige has been a sales tool for carmakers every since Alfred Sloan and General Motors invented planned obsolescence. But, today’s Prius buyer is at least as much a status snob as the buyer of a BMW or Mercedes -Benz, or the buyers of Cadillacs in the 1950’s. He or she just defines status with different reference points.
But there’s a market in environmental snobbery, and both Toyota and Honda aim to exploit it to the fullest.
For Honda, a lesson has been learned. Honda will be introducing a new hybrid in 2009, hoping to sell as many as 100,000 per year, base priced at a little more than $20,000, exactly where the Prius is priced. The new Honda hybrid will have a distinctive styling, an entirely new body not shared with any other Honda car. The company intends that it beat the Prius in mileage, as well.
But Toyota, having turned the words “Prius” and “hybrid” into synonyms in the minds of many, is expected to expand the name into a full line of cars, much as Scion is a separate line from Toyota. The Prius line is expected to include at least three distinct models.
There is a lesson in all of this for other automakers, a lesson that Honda has learned the hard way. Certain people are far less interested in reality than they are with appearance. Environmentalists are as motivated by perceptions of status and prestige as any other car buyer, and more than many. They pay a premium for a Prius because it is a status symbol in their milieu.
As General Motors prepares for the introduction of the Chevrolet Volt in 2010, it had best learn from the Honda and Toyota experience. It will not be enough for the Volt to be the best car. It will succeed only if it makes the right statement about its owner.
That statement isn’t about styling or features. It’s about politics.