PUMPS UP THE ANTE

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In February, a bill was proposed in California that would allow hybrid cars, such as the Toyota Prius or the Honda Insight, to travel in highway lanes reserved for vehicles with more than one passenger (HOV lanes). California law indicates the state created HOV lanes, to stimulate and encourage the development of ways and means of relieving traffic congestion on California highways and, at the same time, to encourage individual citizens to pool their vehicular resources and thereby conserve fuel and lessen the emission of air pollutants. In opposition, the Transportation and Land Use Coalition in Oakland, Calif. counters, this bill rewards those who have already purchased these vehicles and many people who would have purchased them without the incentive. Consequently, this legislation would not significantly shift demand or induce car makers to expedite their transition to hybrid technology. For consumers, though, the reason to consider a hybrid car is no longer simply an altruistic regard for society or the environment. This summer, as the price of fuel, and subsequently electricity, makes energy-saving consumer products much more appealing, there's the added motivation of saving money at the pump, and, in California, anyway, maybe even getting to speed along in the HOV lane.

Analysts who follow the hybrid car market, along with other big-ticket, low-energy consumption consumer products, foresee growth in sales and profits in the coming years as technology and performance among these products improve to meet consumers' demands. Toyota has already upped its scheduled production of its Prius line by one-third because of the increase in demand in the American market. Hybrid car manufacturers like Toyota, Honda and Ford, and appliance manufacturers like GE, Maytag and Whirlpool, could not have hoped for better circumstances to support summer marketing campaigns than the record-high gas and utility prices that consumers have been hammered by. The hybrid vehicle market has seen substantial growth in recent years, according to R. L. Polk & Co. Since 2000, there's been an increase of 25.8 percent in the number of hybrid vehicle registrations in the U.S., bringing the total number of new registrations in the four-year period to just over 103,000. Even as hybrid vehicle sales gain momentum, American Demographics decided to test how hot the consumer waters are over the increases at the gas pump. From July 14 to 18, Harris Interactive in Rochester, N.Y. conducted an exclusive nationwide online survey of 2,320 participants to determine the effects of the rising costs of energy in the consumer marketplace.

No doubt about it, energy costs rank high in importance on consumers' minds. Overall, 54 percent of respondents said that they have tried to use less electricity, or even cancelled a trip in the past six months because of the cost of energy. In the Midwest, South and West, the responses were even higher at 55 percent, 57 percent and 58 percent, respectively. Also noteworthy were the results sorted by marital status: single or never-married respondents were least likely to say they'd altered their actions based on the cost of energy. Only 50 percent of respondents in these segment said that they had changed habits in the past six months, whereas 52 percent of those who were married and 64 percent of divorced, separated or widowed respondents said that they have made lifestyle changes due to the higher energy costs.

While the majority of respondents admitted to making changes in their lifestyles because of the cost of energy, their purchasing habits, especially with regard to big-ticket items, have seen more modest changes. Still, almost 40 percent of all respondents said that the high fuel prices have had an impact on their decisions to buy items like appliances and cars. In the West, respondents were slightly more likely to have taken the price of fuel into consideration, with 44 percent acknowledging the impact on their purchases. Also, men between the ages of 45 and 54 skewed quite high on this issue, with 49 percent saying that the price of gas has effected their purchasing decisions.

As consumers consider the idea of buying energy-conserving products, the California Senate Appropriations Committee postponed deliberations on the bill that would allow hybrids in the HOV lanes to provide incentive to consumers to buy more fuel-efficient vehicles. Meanwhile, all across the U.S. gas prices continue to rise. If the committee waits long enough, the price of gas might be a greater incentive than that quicker drive to work.


For more information and detailed results from the survey, send an e-mail to creynolds@primediabusiness.com or visit www.demographics.com

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