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Business

Germans Rush to Tap Hybrid Market

Spurred on by soaring fuel prices, German carmakers BMW, Audi, Volkswagen and Porsche have announced plans to offer hybrid vehicles by 2008.

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Audi Q7 Hybrid, one of Germany's new concept cars

At this year's IAA International Motor Show in Frankfurt, words like "hybrid" and "biodiesel" were almost as sexy as "convertible" or "super-sport." Still, you wouldn't notice it by driving down the autobahn or checking out the cars on the streets of Wolfsburg or Munich, but sales of hybrid vehicles -- especially in North America -- are starting to raise a few eyebrows among German carmakers.

Maybe the Germans aren't feeling the hurt at the gas pump as much as Americans are these days since gas has always been expensive in Europe, almost three times that of the United States. These days, however, with the average price of petrol in North America doubling over the past 12 months, the margin between Europe and the US has narrowed considerably. This price surge has created a boom market for vehicles with high fuel efficiency, such as hybrids, or with alternative fuel systems.

Two hearts beating as one

The actual "hybrid" part of these new engines pertains to the fact that the drivetrain is powered by both a gasoline combustion engine and an electric motor.

Audi Q7 Hybrid

Audi's Q7 is powered by both a V8 engine and an electric motor that gives it extra power during acceleration

To be more efficient, a hybrid engine simply relies on basic laws of physics, namely, that an object in motion not only requires energy to maintain its velocity -- but it also creates energy. A moving car creates energy by doing things like breaking (which gives off heat) as well as coasting down hills. In a hybrid automobile this energy is captured and stored in a battery, which in turn powers the electric motor. The electric motor is then used to support the gasoline engine during acceleration.

Actual fuel efficiencies gained by driving a hybrid vary depending on the type of driving the car is used for. When driving in a city with a lot of stop-and-go, fuel savings can be quite significant -- up to 50 percent. This savings starts to decrease the longer the car is driven without breaking. So, a long road trip on a highway would provide no additional efficiency.

Diesel still preferred in Europe

One obvious explanation for the reluctance of the German's to immediately jump on the hybrid bandwagon is that European car buyers already have a fuel-efficient alternative on the market -- the good old diesel engine.

Porsche Cayenne Export in die USA

A Porsche Cayenne on it's way to the United States

"Hybrid and diesel, we don't really see a difference between them," explained Marius Lehne, project manager for Audis' new Q7 Hybrid Concept Car. "I believe that there will be different solutions for different regions of the world. We believe that the diesel engine will continue to be the best solution for the European market, but the hybrid could be the alternative to the straight gasoline engine in North America."

Another reason Europeans are wary of pushing hybrids for their domestic market stems from infrastructural differences between American and European cities. Since hybrid cars are designed for low speed stop-and-go city traffic, they might not be popular in European cities where people tend to rely on public transportation rather than driving.

A game of catch-up

Despite the fact that both Audi and VW have been researching hybrid technology for over 15 years -- Audi even tested an A4-hybrid in Europe in 1997 -- all of the major German carmakers have been left in the proverbial dust by Japanese hybrid models that have been on US car lots for well over two years.

"They recognize the success that Toyota and Lexus have had in the North American SUV market and now they have to offer hybrids in order not to loose market share," explained Felix Bauer, managing editor of Germany's Automobilwoche.

Despite their late entry into the game, all of the major German player's present at the Frankfurt Motor Show echo the sentiments of Wolfgang Steiger, director of powertrain research at Volkswagen: "The first hybrid cars came from Japan, but it's often true that the first is always the best! We have been developing hybrid systems and we are pretty sure we can place a system in the market which meets or exceeds the Japanese systems, but with less cost."

A wealth of SUV's

Bildgalerie IAA 2005 Mercedes Bluetec Hybrid

An S-Class Mercedes-Benz with a Bluetec hybridmotor

In order to enter the market as quickly as possible, German auto manufacturers have been establishing partnerships to reduce the significant development costs of installing these new component systems. In early September, BMW announced its plan to partner with DaimlerChrysler and General Motors to manufacture a hybrid drivetrain. Shortly thereafter, Audi, Volkswagen and Porsche also formed a partnership to develop a hybrid system for their SUV lines -- namely the VW Touareg, the Audi Q7 and the Porsche Cayenne.

As gas prices in the US continue to inch upward, Americans who relish the space and performance of SUV's are turning to hybrid models to recoup a few precious gallons at the pump.

For a country that is used to setting the precedent for innovation, Felix Bauer claims that Germany is currently riding in the back seat. "Porsche always said that they would never make a hybrid, but now Lexus has shown that they can make a very speedy hybrid engine. Maybe this is a time for the Germans to show that they have the engineering chops to compete."

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