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Will green-car buyers bite at Porsche’s high-speed hybrids?


Among the rush of green car announcements at this week’s Detroit auto show, Porsche unveiled two new entries in the green car race. First, the German supercar maker announced a hybrid version of its Cayenne SUV, due in 2010 (photo above). Porsche also said that after its all-new Panamera ( a grand touring, 4-door sedan) debuts next year, a hybrid version will follow sometime after (see diagram below). There’s no price information as yet, but these models are likely to cost three, four or more times the cost of a Prius hybrid.

This news is likely to cause head scratching among both Porsche purists and green-car zealots. Few brands are more tightly married to the high-adrenaline, big-horsepower thrills of super-powerful gas engines than Porsche. So it’s fair to ask if the brand’s acolytes will be turned on by fast, gas-electric versions of the Cayenne or Panamera. On the opposite side of the green-car debate, critics argue that “greening” fundamentally low-mileage vehicles such as SUVs and sports cars is like dressing up a pig: they might look a bit better, but they’re still gas hogs.

Porsche’s product developers are no fools, of course, and are likely aiming for a sweet spot somewhere between these two perspectives. Porsche surprised market watchers with the success of its Cayenne SUV line, initially dismissed by loyalists. At the time, a heavy, SUV with a high center of gravity seemed like an odd addition to Porsche’s sports-car focused family. Yet the move proved genius, luring a generation of soccer-moms and -dads into a pricey vehicle that offered speed and styling edge unequaled in bland SUV-land. Sure it’s not a 911, but it’s way faster and more aggressive than the armadas of boxy SUVs plying America’s parking lots.

With its recent hybrid announcements, Porsche is headed into a trickier marketing minefield of hybrids. The mind of the hybrid buyer remains a mysterious set of overlapping, sometimes contradictory, preferences. Some green buyers are clearly motivated by gas savings, yet have been willing to pay more the virtue than the value of the gas it saves. This suggests green minded buyers will pay a premium for positive perception. It’s not far to scoff at this sort of prefence, as many skeptics of hybrids tend to do. Willingness to pay more for a brand image, no matter what you think, sits at foundation of capitalism. It’s no different than the way branded or luxury goods buyers are happy to pay more for a good with the same utility as a lower priced alternative. Sure, you can scoff at folks willing to pay $5 for toothpaste, $400 for jeans, $3,000 for shoes, or $50,000 for a watch when equally functional alternatives exist. But the brands behind these products are often lucrative, long lived, and understand sales psychology.

In this sense, Porsche may be starting from an advantaged position. The good news is that the Cayenne demographic -- rich folks who will pay a premium for the perception and possibility of speed, even if they seldom use it -- overlaps with buyers who have shown a proclivity to pay a premium for green cars. As evidence, consider strong sales of early generation hybrids such as the Prius. Even though the life-time cost of these vehicles was higher than gas models, the order backlogs kept growing. The bad news for Porsche is that early efforts at high-end hybrids -- which so far have offered only so-so efficiency gains – have delivered so-so sales, or worse. At $43,000 Lexus’ RX450h has done reasonably well. But at more than $100,000 --in a range where Porsche’s hybrids are likely to prowl -- Lexus’ LSh has been a disappointment.

Finding the just the right blend of mileage, speed and luxury is Porsche’s challenge. If the company can tweak its parallel-hybrid drive train to deliver the punchy acceleration Porsche buyers crave, while delivering in high mileage in normal driving mode, the company could have a real winner. Early technical details show that Porsche has developed a parallel hybrid, closer to GM’s design than to the serial approach pursued by Toyota. The technology is nicely written up over at Autocar.co.uk, have a look there for deeper details on the configuration.

If Porsche can deliver the 34 mpg it's aiming for in the Cayenne, I say more power 'em. This may not be a 45 mpg Prius, but if a fast hybrid lures more buyers to go green than would have have otherwise, it's a move in the right direction.


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