Ailing automakers offer little bit of everything

When the San Diego International Auto Show opens today, it will offer a peek inside a fractured industry trying to find long-term solutions for reviving sales and meeting demand for higher fuel efficiency.

Virtually every manufacturer will showcase a hybrid model or one of several power sources vying to become the dominant platform of the future — including electricity, ethanol, natural gas and hydrogen. In all, about a quarter of the 500 vehicles on the floor rely on alternative fuels, up from about 5 percent two years ago.

The array of choices highlights how tricky it is for manufacturers to predict the best development strategy, made more difficult because it takes billions of dollars to conduct research and ramp up production for a new generation of vehicles.

Hybrid engines have a big head start, thanks to the Toyota Prius, but industry analysts said no single technology is likely to replace the conventional gasoline engine in the foreseeable future. They predict it will take a “portfolio” approach to meet the multifaceted demands of the American consumer.

“There is so much confusion in the U.S. over which alternative technology is best,” said Patrick Serfass, a spokesman for the National Hydrogen Association, a trade group in Washington, D.C. “The fact is that you have many different kinds of vehicles and many different kinds of transportation needs.”

Nowhere is that more evident than at auto shows such as the annual affair in San Diego. It will feature alternative powertrains on dozens of vehicles, such as a concept electric coupe by Cadillac and a hydrogen-powered SUV from Chevy.

Next month in Detroit, Toyota is expected to unveil a subcompact, hybrid-only model designed to lower the entry price for a product line dominated by the Prius. Media reports also have said the company is developing an all-electric car for 2012.

While most automakers are experimenting with several power options in hopes of finding the best one — and not being left behind if one technology bolts ahead — some industry experts predict that competing devices will be merged into complementary packages.

“There is more activity going on than ever to develop alternatives to gasoline,” said Karl Brauer, editor in chief of Edmunds.com , an online automotive research firm based in Santa Monica.

The buzz is good for the auto industry, even though alternative technologies have had little practical effect on the environment and carmakers’ bottom lines. A decade after the hybrid segment was born, the vehicles still account for less than 3 percent of total annual sales in the United States. As the recession gripped the overall car market, hybrid sales have fallen nearly 25 percent from their peak of about 350,000 vehicles in 2007.

“You have a lot of car companies who know that it’s a long way off — if ever — that you are going to have a viable mainstream alternative to gasoline,” Brauer said.

“But they also know that there is a lot of publicity and promotion and P.R. to be made from having alternative drivetrains,” he added. “They noisily go about unveiling alternative technologies while they quietly go about upgrading and refining internal combustion engines to maximize efficiency.”

At Fuller Ford in Chula Vista, general sales manager John Carlson said customers commonly want to look at hybrid models such as the Fusion but typically settle on a less expensive gasoline version.

He’s excited about the prospects for the all-new Fiesta, a sporty compact car with a conventional engine that he expects to appear in showrooms by mid-2010. It will come with a sticker price of roughly $15,000 and ads that boast 40 miles per gallon on the highway.

Over the next five years, “I think what will be dominant is more-efficient gasoline cars,” Carlson said.

Other industry experts agree, but automakers still are spending loads of cash to design, produce and market more environmentally friendly options to the public.

“The landscape of auto shows has changed dramatically over the past couple of years,” said Joe Rohatynski, a spokesman for the San Diego event. “More and more, auto shows are places to really learn about the new automotive technologies that are here and now. Just a few years ago, these were things of the future.”

Scott Settlemire, exhibit manager at the San Diego show for General Motors, said each new technology comes with benefits and drawbacks. Pump stations for hydrogen, ethanol and other fuels can be hard to find, while “plug-in” electric cars have been hampered by limited battery range — something Chevy hopes to change with its long-anticipated Volt model.

While the array of choices may be daunting, Settlemire said the companies’ goal is to make consumers feel comfortable even if everything is unfamiliar under the hood.

“They are not going to want anything different from what they do in a conventional car,” he said. “They want to get in, turn the key and go.”

And they want to do that at prices comparable to what they’re used to paying — an elusive target so far. It would cost up to $18,000 more to make a plug-in electric hybrid in 2010 compared with manufacturing a similar gas-powered car, according to a report released this month by the National Research Council in Washington, D.C.

Premium prices will restrict initial sales of plug-in hybrids and fuel-cell vehicles to the same early adopters of hybrid cars, said Brauer at Edmunds.com .

“You have to be in love with the technology and what its statement is,” he said.

Costs should come down as automakers discover which technologies offer the best value. Alternative vehicles likely would get a major boost if there’s a big run-up in gas prices or if Congress offers financial incentives to promote energy diversification.

The recent report from the National Research Council said tens of billions of dollars in subsidies would be needed to help plug-in hybrids quickly penetrate the U.S. market.

Even if that happened, the authors predicted only a minor effect on national oil consumption by 2030.

Larry Papay, an energy consultant in La Jolla who helped write the report, is upbeat about the movement to decrease vehicle pollution and reliance on foreign oil but said patience is needed as various technologies and fueling stations take shape.

“You have to stop and realize how massive the existing automotive infrastructure is,” he said. “It’s going to take time to be able to evolve.”

Story by Mike Lee, UNION-TRIBUNE STAFF WRITER (San Diego)Ailin