By TBY | Dominican Republic | Feb 04, 2015
COSTS The purchase price of a hybrid vehicle is indeed more expensive than its conventional gasoline counterpart. However, with the current cost of gasoline, hybrid technology offers much better value, […]
The purchase price of a hybrid vehicle is indeed more expensive than its conventional gasoline counterpart. However, with the current cost of gasoline, hybrid technology offers much better value, especially for vehicles operating in urban areas. Due to significant fuel savings, the payback on hybrids usually takes three to five years. In the words of Nelson Peña, CEO of Peravia Motors, “the car essentially pays for itself. The down payment is expensive, but within five years driving is almost free as you use neither gasoline nor oil.” But the reduction of fuel costs is not the only advantage of investing in hybrid vehicles; hybrids are also better for the environment, as well as the bottom line of a fleet.
The potential of hybrid technology has expanded significantly in the last few years mostly due to the inclusion of plug-in hybrid electric vehicles (PHEV), hybrid electric vehicles with rechargeable batteries that can be restored by connecting a plug to an external electric power source. PHEVs share the characteristics of both, conventional and hybrid electric automobiles, having electric motors along with internal combustion engines. Plug-in hybrid technology allows the user to reduce costs and exposure to the volatile oil market by powering automobiles from electricity grids. The CEO of Peravia Motors, “considers dual-mode vehicles to be the most appropriate currently as they do not require a recharging station. (…) People can charge them at home, where the car recharges in 3 to 4 hours.” PHEVs are also a good option because the price of electricity is more stable and much easier to predict. Moreover, PHEVs eliminate the “range anxiety” often associated with electric cars. Their combustion engines work as a backup when the batteries deplete.
To date, approximately 9 million hybrids have been sold worldwide. Among all hybrid vehicles, the Toyota Prius has been an absolute number one seller. This hybrid is now the fifth best-selling car in the world, which is a truly promising signal for the hybrid segment. The US is currently its largest market with more than 3 million hybrids, followed by Japan with sales exceeding 2.6 million units.
ENHANCING THE IMAGE
In the words of Alfredo Najri, the General Manager of Delta Comercial, “people are still not aware of their (hybrids) sheer advantages, but we are working to enhance the image. We staged a photo opportunity with our first customer, and people have come to hear about these vehicles through the grapevine.” Nelson Peña also claims that “penetration is low, because people are not familiar with these technologies.” That is why Peravia Motors’ main marketing strategy is for people to drive the car when they visit the dealer’s showroom. Both companies have told TBY that they see potential for growth in the hybrid sector in the long term.
In March 2014, the Ministry of Economy, Planning and Development of the Dominican Republic announced that the country received a $5 million donation from the Japanese Government for the purchase of 125 hybrid vehicles. The vehicles have been assigned to 16 Dominican Ministries and will be delivered in the mid-2015. Japanese Embassy commercial attaché Yuji Takeya said that “the donation of the new generation vehicles forms part of his country’s efforts to bolster the friendly relations and cooperation between the two countries.” He also added that “the vehicles have a low environmental impact and consume less fuel, which in his view contributes to Dominican Republic’s sustainable development, reducing pollutants and greenhouse gas emissions.”
The number of hybrid vehicles is likely to further grow because of three main reasons:
• Firstly, due to increasing awareness among customers who are becoming more familiar with this technology and developing positive attitudes towards hybrid vehicles.
• Secondly, because the quality of hybrid technology has significantly improved over the years and the number of product offerings keeps growing. There will be more hybrid options in more vehicle classes and styles in the near future.
• And last but not least, the hybrid sector is likely to grow because of rising concerns over the environment and the favorable economics of this technology.