Hybrid gas-and-electric cars are an increasingly common sight on America's roads, but Ford (NYSE:F) is putting an interesting new spin on the burgeoning trend. Starting today, the automaker says that it will offer a brand-new hybrid vehicle, the company's second, almost exclusively online. The big question: Is a vehicle in this hot market hot enough to appeal to consumers sight unseen?
Hybrids have been doing very well, as my Foolish colleague Nate Parmelee pointed out back in April, and all kinds of automakers have been getting into the act. Japan's Toyota (NYSE:TM) and Honda (NYSE:HMC) clearly beat General Motors (NYSE:GM), Ford, and DaimlerChrysler (NYSE:DCX) to the punch.
I've been thinking recently about the ways in which the current environment -- economic and otherwise -- might spur consumers' interest in fuel-efficient hybrid vehicles. Many drivers are concerned that gas prices are high and getting higher. Some states offer special incentives to hybrid owners on crowded highways. Moral factors figure into the decision, too. Individuals' increasing empathy toward environmental concerns makes being "green" more hip than fringe these days.
Weirdly enough, the contradictory trend of America's love affair with SUVs continues unabated, which probably explains why Ford's second-ever hybrid vehicle, like its initial Escape Hybrid, is an SUV.
Ford is offering the new Mercury Mariner Hybrid almost exclusively online, a decision that mystifies me. According to the company's Web site, "The majority of the 2,000 initial production Mercury Mariner Hybrid models will be ordered online in a first-come/first-served real-time basis. And in a first for Ford Motor Company, those orders will determine which dealers receive the vehicles." Ford's rationale was that its target customers for the Mercury Mariner are "far from traditional," adding that "more than 80% of Mercury shoppers begin online." It's not far-fetched for auto buyers to go online for research, but there are parts of Ford's plan that seem like quite a stretch to me.
While buying a car online these days is hardly revolutionary, Ford's news sparked an impromptu debate among my neighboring Fools. Many of us said that while we would likely buy a car online, we would require a good old-fashioned test drive before we closed the deal. Diehard early adopters aside, there are still plenty of people whose concerns about hybrid technology might prevent them from buying a car without seeing it on the lot. It's possible that Ford intends to have hybrid Mariners on hand at selected dealerships, but it doesn't seem likely given the vehicle's relatively small initial production run. Ford's press release makes no mention of such plans, either.
Ford did say that it would advertise the new hybrid on the Web sites of "key environmental organizations," namely Sierra Club and National Geographic. I'd question whether anything that looks like an SUV, hybrid or not, will appeal to that demographic.
It seems to me that Ford is making a strategic error here, despite its attempt to capitalize on certain social trends. While hybrids appeal to shoppers on the many levels I mentioned above, I doubt that environmentalist zeal or hybrid hipness will supersede most consumers' needs to physically check out a vehicle.
For related content, please see the following Foolish pieces:
- Ford recently hooked up with BP for some green cred.
- Japan makes a hybrid statement.
- Back in April, data showed that hybrid sales had blasted off.
Are you in the market for a hybrid? Talk to other Fools who are well acquainted with the process on our Hybrid Vehicle Fools discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
