Our New Car

When we were looking for a new car, I read with great interest a review that said “the VW Jetta SportWagen saved my life when I was T-boned.” Since my wife had herself been T-boned, this got our attention very quickly. She is now OK, but the car she used to drive, a trusty Subaru Impreza Outback Sport that she had loved, sacrificed its life in the process of saving hers. When we first starting looking for a replacement car, I was hoping she would prefer the most environmentally friendly hatchback that had good safety rating (represented by the Prius due to gas mileage). Ultimately, we ended up with something else. The something else was a VW Jetta SportWagen (regular gas engine, not the diesel).

Our first choice was the redesigned Impreza, but its relatively small trunk did not play nicely with our toddler’s stroller. So how did we arrive at the VW instead of the Prius? The answer for us, like many automobile buyers, is that gas mileage, while important, is not the only thing we looked for in buying the car. We absolutely wanted to improve the gas mileage over the old Impreza’s 22 mpg city to 27 mpg highway, so it was important. But other goals were important also. These included a hatchback, good safety ratings, ample storage, and ease of driving (being able to see clearly out of the car while driving). Being able to have the toddler seat in the middle of the car became surprisingly important also.

Underlying all of these factors was probably the most limiting one—price. Since we wanted the latest safety technology, we wanted a 2013 (or 2012) car if at all possible. We had a certain price target that we felt we could afford. The net result of that was a car in the low 20s, which put a number of models in the mid 20s out or range. Additionally, we ended up having a fairly limited time window to actually buy the car. Given where we were in the overall car market, we were thrilled to actually have 2 realistic options to choose from, a 2011 Prius and a 2013 Volkswagen Jetta SportWagen. (We made an exception to our new car idea to include a used Prius, mostly for the gas mileage.)

Looking back, it is very interesting for me to realize that for the car purchase, I gave practically no consideration to the usual sustainability aspects that I have used for many other product purchase decisions. For example, I did not consider at all where the product was made. Nor did I concern myself with the environmental practices of the factory where the car was made. I recently found that a Toyota dealer in Allentown is actually LEED (green building) certified but LEED never entered my mind during this process. The most important factor in choosing which dealer got the deal was the price they offered me.

For this decision, gas mileage was the beginning and end of the consideration of the environmental aspects of the car. While gas mileage was on the list, it ended up not being as important as the combination of safety, visibility, and storage, toddler comfort, and most crucially, price. What ultimately swayed the decision was that my wife had loved her Impreza except for the mileage. It became apparent that the VW (Jetta SportWagen) had all of the advantages over the Prius (storage, visibility, ease of driving)—except for gas mileage. So we went for the VW (and settled for a 15%-20% improvement in gas mileage vs nearly 100%).

Given the market segment we were in, I should be happy we found something at least as good as the trusty, recently departed Impreza. Instead of being disappointed that the VW does not deliver the gas mileage of the Prius, I should be happy that it is delivering a similar driving experience to the old Impreza, with more storage for the toddler’s stuff and better gas mileage. I have no curent plans to replace my Subaru. But if I have to, I will be very curious what combination of price, storage, safety, and mileage both Subaru and VW can bring to the table. For that matter, I’ll be looking to see if any other brands have that combination as well.

On the Road Again

The automobile, with its gas engine, is perhaps the strongest symbol of an economy powered (and driven) by fossil fuels. It may surprise the reader to learn that at one time, the gasoline engine was only one of numerous competing technologies. In the early 20th Century, the gasoline engine won. In the early 21st Century, there is another competition for engine technology. The incumbent is the standard gas engine, while some of the challengers are gas-electric hybrid, electric only, diesel, diesel-electric hybrids, etc. From a sustainability perspective, none of the challengers have to dethrone the incumbent; they just need enough people to buy them to keep them in business. If these technologies are commercially successful at all, then the amount of petroleum needed for transportation will go down, even if only incrementally.

Model years 2010 and 2011 (and to a lesser extent, 2012) are shaping up to be critical years for automobile engine technology. The most well known challengers are gas-electric hybrids like the Toyota Prius, Honda Insight, Ford Escape, etc. In 2010, for the first time in recent memory, a primarily electric car will be on the market, courtesy of the GM Chevy Volt—40 mile range, around $40,000. Nissan is promising a 100- mile range vehicle (the Leaf), available in the US by the end of 2010. Renault’s all electric entry, announced at the recent Frankfurt Auto Show, will follow in 2011. (If you are a lucky New Yorker, you are road testing an all-electric BMW Mini Cooper slated for launch in 2012). All of these electric cars feature rechargeable batteries.

At the same time, other “greener car” technologies are in various stages of development. Companies like Toyota and Ford are expanding and improving their hybrid product line. Volkswagen is testing diesel-electric models. Diesel is also gaining more attention as a fuel-efficient alternative to the conventional gas engine. Subaru is one company (along with Volkswagen) working on this kind of technology. And, other companies are trying to make the conventional gas engine more efficient with better gas mileage.

All of this activity implies that the manufacturers feel that a market exists to buy some kind of electric or hybrid car. Does it? That is open question. Some elements of the auto industry are rather dubious. The head of Audi North America has been quoted as saying that no one will pay $40,000 for a Chevy Volt (electric) when there are numerous competitive gas engine options for $25,000. And there have many comments to the effect that buying a Toyota Prius does not make sense because you cannot save enough in gas money to make up for the hybrid price differential. So therefore, the argument goes, only a few people will buy these cars. This flies in the face of the success of the Prius and other hybrids, especially during last year’s spike in gas prices.

Even if the “green car” buyers are only a segment—so what? There are many segments of the auto market. There are SUV buyers, truck buyers, muscle car aficionados, family minivans, cruisers, etc. Those segments thrive. The evidence is anecdotal, but I do think that there are enough people to make a segment of buyers for some version of electric or hybrid cars. After all, almost all of the world’s carmakers are developing some sort of non-gas engine technology.

The skeptics are also forgetting that new technologies in many fields tend to come down in price as they get introduced into the market place. Also, if something becomes fashionable, cost becomes a whole lot less important if it is even remotely competitive. If enough people buy these cars, then “electrics” or “hybrids” will become a sustainable segment in the auto market. When it comes time for me to buy another car, hopefully I can join one of these segments.

http://www.businessweek.com/globalbiz/content/sep2009/gb20090917_962378.htm