Automotive News - March 23, 2020 - 8

8 * MARCH 23, 2020

Hybrid crossovers breaking out of niche
Emerging compacts find
sweet spot for design,
price and performance

The current field of hybrid compact crossovers offers a
boost in horsepower and fuel economy at a modest
premium.
HORSEPOWER MPG, CITY/HWY/COMBINED

liliff@crain.com

onda's timing to bring the hybrid
version of its popular CR-V compact crossover to America was
looking pretty good right up until a few weeks ago.
After receiving mostly positive
reviews following its introduction
in Europe last year, the Japanese
brand's first electrified crossover
was ready to do battle with the redesigned Ford Escape Hybrid
that hit the market in December
and the strong-selling Toyota
RAV4 Hybrid, now in its second generation.
The expectation for crossover hybrid sales
was evident in the decision by the three automakers to build their electrified versions in
the U.S. No longer niche products shipped
from afar, hybrids looked to become a healthy
subsegment of the already-crowded compact
crossover group.
But alas, the CR-V Hybrid's arrival in showrooms in early March coincided with an oilprice war, a global pandemic and a world
turned upside down. Gasoline is cheap, consumers are pulling back from the auto market
in general, and environmental concerns are
not currently top of mind.
It won't be forever, though, according to analysts.
When auto sales return to healthy levels,
hybrid crossovers are poised to become
mainstream vehicles because of the maturation of the technology. They were once rolling science experiments with little power
and weird styling, but now hybrids represent
a step up from their gasoline-only counterparts.

Looking at the horizon
And when the market does come back,
there are likely to be new competitors in the
segment. Hyundai sells a hybrid Tucson in
Europe. The next-generation version of the
compact crossover is likely to include a hybrid variant for the U.S. Kia's next Sportage
should follow suit at some point. And the discontinued Nissan Rogue Hybrid is expected

PRICE*

Honda CR-V
LX gasoline, awd
LX hybrid, awd

190
212

27/32/29
40/35/38

$27,670
$28,870

Toyota RAV4
LE gasoline, awd
LE hybrid, awd

203
219

27/34/30
41/38/40

$28,470
$29,470

Ford Escape
SE gasoline,
1.5L EcoBoost, awd
SE hybrid, awd

181
200

26/31/28
43/37/40

$28,290
$29,450

Honda CR-V Hybrid:
About $1,000 more
than an all-wheel-drive
gasoline version.

*Price includes shipping

Toyota RAV4, left, and Ford Escape hybrids are well established as mainstream models.

Laurence Iliff

More for a little more money

Last year, U.S. RAV4 Hybrid
to make a reprise when the
volume nearly doubled to
Rogue lineup enters its next "One of the things
92,525 - accounting for 1 in 5
generation.
about the new
In the case of the CR-V, generation of hybrids sales of the fourth-best-selling
nameplate in the country. Part
RAV4 and Escape, the hybrid
is they're not as
of the reason for that high take
versions all offer more power
rate is the generally modest
than the standard gasoline sluggish as they
price premium - a $1,000 difengines. They are subjective- used to be."
ference between comparable
ly more fun to drive because Sam Abuelsamid
all-wheel-drive trims - along
of the jolt of electrons from Navigant Research
with a performance upgrade.
standstill, and they are more
"The thing about the U.S.
refined thanks to the silent
market is gas remains cheap, and it looks like
electric motor at low speeds.
it's going to get even cheaper," said Abuels"One of the things about the new generaamid. "American consumers today don't retion of hybrids is they're not as sluggish as
ally seem to be inclined to pay a premium for
they used to be," said Sam Abuelsamid, prin45 mpg, but they'll pay for something that
cipal research analyst at Navigant Research.
gets to 60 mph a half a second quicker."
"They all drive pretty well now and have decent acceleration."
They also get around 40 mpg in combined
Strategic shift
highway/city driving.
Automakers have finally switched their strat-

egy of trying to squeeze out as many hybrid
miles per gallon as possible while sacrificing
everything else, including styling. The new hybrids look pretty much like their gasoline-only
counterparts. Mainstream consumers want
normalcy over green credentials.
The CR-V Hybrid is almost indistinguishable from the gasoline version. There is a blue
hue in the front Honda badge, a hybrid stamp
at the rear and a unique bumper that hides
the tailpipes. The RAV4 Hybrid has a unique
trim, the XSE, with black wheels and twotone paint job. Likewise, Ford sells the Escape
as a "Sport Hybrid" with black wheels and
chrome. But they're still designed to be mainstream vehicles.
One reason for the change in attitude by
manufacturers is that hybrids are increasingly important toward meeting corporate average fuel economy targets. Plug-in hybrid options are becoming increasingly popular on
the higher trims of premium vehicles because of the performance boost.
Ford is planning a hybrid F-150 pickup that
has the advantage of being able to run power
tools without an external generator. Fiat
Chrysler Automobiles is planning plug-in hybrid Jeeps. Ford and Toyota have already announced plug-in hybrid versions of the RAV4
and Escape coming this year. Toyota is billing
the 302-hp RAV4 Prime plug-in hybrid as "the
most powerful and quickest" version yet.
see HYBRIDS, Page 9

Some dealers opt out of factory ad dollars
Going with outside
digital vendor gives
more flexibility
Vince Bond Jr.
vbond@crain.com

When dealers seek the best digital
marketing vendors, they are often
faced with a choice: Use a company
that has preferred status with their
automaker - with the support of coop advertising money - or take a
chance with an outside vendor and
bypass the co-op dollars.
As dealers try to grab consumer attention in the digital age by tailoring
campaigns for their markets, some
are choosing the outsider.
That can lead to more individualized consumer outreach, said Nick
Brunotte, director of industry practice for consultancy DHG Dealerships. He has seen firsthand how
some dealers have decided to forgo
co-op money in favor of vendors
without preferred status.
The reasons are many. Sometimes
preferred vendors get bombarded

Dealer Pat Koballa hired a different advertising vendor for a "tailored approach."

with dealership clients because of
that automaker stamp of approval,
Brunotte said, and they subsequently aren't able to customize campaigns for dealerships in different
markets. At a time when technology
is changing rapidly, dealers often
want to experiment.

"Dealers would like to see an opportunity to try and test new products as they come out," said Mike
Bowsher, chairman of the Chevrolet National Dealer Council and
owner of Carl Black Automotive
Group in Kennesaw, Ga. "There are
so many new digital go-to-markets

that come out weekly, daily, monthly."
Testing such products is necessary
because dealers otherwise won't be
able to determine what will help
them, Bowsher said. But "if dealers
don't have the co-op wherewithal to
do it, many of them won't try it."
Some automakers have responded
to that pressure. In 2019, General
Motors expanded dealers' options
for preferred website providers beyond CDK Global Inc., which previously had exclusivity.
Bowsher said it would help if GM enticed dealers by saying, " 'If you'd like to
try that X, Y or Z for 90 days, we'll support it.' We're asking them to allow us to
test and try new things on a certain percentage of our co-op dollars."
With the high number of dealerships in a preferred-vendor program,
the vendors sometimes get backed
up. Brunotte recalled recommending a website provider with preferred
status to a dealer only to find out the
migration would have to occur
months down the line.
"Part of the reason the dealer

wants to change platforms anyways
is because they don't like their current one," Brunotte said. "It's costing
them effectiveness, and now all of a
sudden, they have to be ineffective
for another six months because they
can't switch."
Such logjams also can hurt effectiveness once a program is in place at
a dealership. Each dealership should
be treated differently, Brunotte said,
but many preferred vendors deploy
"boilerplate strategy."
"The GM dealer in Ohio - their
[search engine optimization program]
is the same as the one in Arizona," he
said. "It's just in order to keep up with
the sheer volume; it's cut-and-paste.
That's not fair to the dealer."
Pat Koballa, dealer principal at
Coastal Kia in Wilmington, N.C., recently made the switch from a preferred vendor to a smaller company
better suited to his dealership's
needs.
Koballa said he'll now have to
jump through hoops to get back the
see CO-OP, Page 9

Automotive News - March 23, 2020

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