Civilized hybrid SUVs find hot niche

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A buick sport-ute for the young and active sounds as unlikely as a Ferrari forklift.

The Buick and other hybrid sport-utility vehicles take the macho bodywork of a go-anywhere sport utility and mate it with the smooth-riding platform of a family sedan. The hybrid SUV category, which some experts say was first sparked by the introduction of the 1996 Subaru Outback, caught fire after the introduction of the '98 Lexus RX300.

"Absolutely, without question, this is going to be the `next big thing' in niche vehicles," says Gordon Wangers, managing partner at consultancy AMCI. "Crossovers have the potential of accounting for over a million sales in the next five years."

These vehicles will be appealing to owners of traditional truck-based SUVs who are tired of paying more than $60 for a tank of gas and unhappy with the bone-jarring ride and dreary handling. Sedan owners who like the idea of the big cabin versatility of an SUV, but with car-like pep and road manners, will appreciate the style, says Mr. Wangers.

"Will this hybrid segment continue to grow? Yes. Lexus RX300-type vehicles provide a nice alternative not only to a sport utility, but to a minivan, wagon or family sedan," says Greg Kitzens, corporate marketing manager for Toyota Motors Sales USA's Lexus brand. "There are a lot of similar products on the horizon and competition is certainly going to heat up."


Some of that competition may come from General Motors Corp.'s Buick Rendezvous. The $29,000 Rendezvous, due this time next year, takes many of its styling cues from the benchmark Lexus.

"We see the Rendezvous as an intelligent approach to a mature, fragmenting segment of the market," says Mark Reuss, GM vehicle line exec. "We see it appealing to people who have never considered a Buick or a GM vehicle in the past, as well as to people who don't want another SUV."

Rendezvous shares its platform with Pontiac's funky-styled Aztek hybrid, which starts rolling into showrooms in May. The vehicles are expected to have annual sales of between 50,000 and 70,000.

The Aztek, available in August, breaks new ground for GM styling. The five-door Aztek is being marketed to fun-loving Generation X car buyers. It can carry mountain bikes inside, surfboards on top and even has pullout boom box-style speakers for tailgate parties.


The marketing launch mirrors that spirit with a June TV promotion to air during CBS-TV's "Survivors," a new series. Pontiac is the sole auto advertiser for the 13-week series, which sends 16 people to a remote island near Borneo to test their survival tactics. The series is to end with a vote determining the best survivor -- for a $1 million prize.

The Aztek effort includes contest prizes of $1 million and an Aztek. The campaign includes a heavy print schedule and some cable TV advertising, but 10% of the media budget will be spent on an Internet ad buy.

"There's a notion that the market is becoming a sea of sameness," says Mr. Butler. "We wanted to be on the edge with our styling."

The Aztek won't be on its own in its effort to win the affection of Generation X.

DaimlerChrysler just entered the ring with its PT Cruiser. The introduction is backed by a global TV and print campaign, handled by FCB Worldwide, Southfield, Mich.


This funky five-door, which looks like a cross between a '50s hot rod and a London taxi, hit showrooms this month with a tough-to-beat base price of just $16,000.

"The PT is just too cool to categorize," says John Miller, VP-product planning at Chrysler. "It has the size and price point of a small car, but it comes with the interior space of a minivan, and the versatility of an SUV."

Since its unveiling at last year's North American International Auto Show in Detroit, Chrysler has been inundated with requests for information.

So far, the PT Cruiser Web site has generated more than 600,000 hits. A direct response ad, created by FCB, generated more than 250,000 replies after running in Automobile, Car & Driver, Motor Trend and Road & Track last summer and fall.

"The PT has been a marketer's dream. No vehicle has generated so much excitement," says Susan Thomson, senior manager of Chrysler advertising. She says a free Swiss Army knife was sent to 50,000 early inquirers to get them thinking about PT's versatility and durability.

"Advertising and marketing is critical to this hybrid segment," says Mr. Wangers. "Take Nissan's Xterra. If you showed up from Mars, you'd think it was a scaled-down version of Nissan's other SUV, the Pathfinder. But look at the advertising, showing lots of Gen Xers on mountain bikes, and it takes on a personality of a hybrid vehicle.

"The same goes for the Subaru Outback, which was really defining this market before anyone else. Yes, Outback is a station wagon. But through clever marketing, they made it into something different. They even branded it a sport-utility wagon," Mr. Wangers says. Temerlin McClain, Irving, Texas, handled the Outback's launch.

The 2000 BMW X5 went on sale in December with advertising by Fallon McElligott, Minneapolis.


Demand has been high, and buyers may wait as long as 10 months to take delivery on the X5.

"We wanted to try and get across the message that there is a real joy in driving the X5," says Bert Holland, BMW's SAV-series manager. "With traditional SUVs, the fun is to be had when you get there. With this vehicle, we're saying that the getting there is the fun part."

Mr. Holland says the hybrid SUV market will segregate into luxury and compact niches, much like the car market did. Hybrid SUVs like the Aztek will sell alongside four-door pickups.

"People are beginning to understand all the benefits hybrids have to offer. The appeal will only continue to increase," says George Peterson, president of consultancy AutoPacific. He predicts that by 2005 there will be 79 SUV nameplates, compared with a mere 32 in 1996 when AutoPacific began monitoring the market.

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