When Americans think of hybrids, they think of Toyota-and that's a problem for General Motors Corp.
The Japanese automaker's head start in hybrids has given it a 75% share of the segment. Toyota, which markets the Prius, Highlander SUV, hybrid Camry and Lexus RX400h SUV, will sell nearly 200,000 hybrid units this year-double its tally in 2005.
Though the segment is still small, it's growing: J.D. Power & Associates expects hybrid vehicles to go from 1.6% of U.S. auto sales this year to 5% in six years. "A lot of that is due to the sheer number of hybrids that will be available to consumers," said Kevin Riddell, an analyst at Power's forecasting unit. "There's going to be more variety among more manufacturers who will give us a lot of options."
Among them is GM, which plans to launch its first true hybrid vehicle for the mass market in about a year.
GM did introduce a 2006-model hybrid Chevrolet Silverado full-size pickup, but it could not run just on the battery, a spokesman said. GM sold only about 3,000 of them in 2005 and did not advertise them. It also plans to add a so-called two-mode hybrid Chevy Silverado to its lineup in calendar 2008.
But first up will be the 2008-model, two-mode hybrid Chevrolet Tahoe and GMC Yukon SUVs, which will go on sale in fourth-quarter 2007.
GM said the new hybrid system has two electric motors that will improve fuel economy in both city and highway driving. Other hybrid systems, most notably the Toyota Prius, offer better fuel economy only in more stop-and-go city driving.
GM has also introduced the Saturn Vue Green Line hybrid. Saturn stuck with national shop Goodby, Silverstein & Partners for the launch. A spokesman for Chevy did not return calls by press time, so it is unclear if the Tahoe hybrid will be handled by longtime agency Campbell-Ewald, Warren, Mich.
Since hybrids arrived on the scene, only Toyota has opted to use another ad agency. It turned to Denstu America, New York, (then called Oasis) for the Prius-launch print ads in 2000. Since then, Saatchi & Saatchi Los Angeles, Torrance, Calif., which created the original TV spots, has handled the entire campaign.
Sibling Lexus' national shop, Team One, Santa Monica, Calif., handles all of its hybrid advertising, said Deborah Senior, corporate advertising manager for the brand. She said Lexus uses a lot of print ads to help explain the hybrid technology to prospects "because there's an education process." The marketer has also found that events are a great way to allow consumers to experience the hybrid system.
Part of the education process is dispelling myths that linger from earlier electric-car introductions. The Prius and Honda's Insight, which was introduced in December 1999, both were plagued by consumer misconceptions that the cars needed to be plugged in to charge.
Particularly for Toyota's Prius, advertising and unpaid celebrity endorsements-from the likes of Ed Begley Jr., Charlize Theron, Leonardo DiCaprio and others-have opened consumers' eyes.
And despite Toyota's inroads, GM and others will have to spend big on marketing. "It's going to be an education process, and GM is going to need a lot of advertising," said Ron Cogan, publisher of Green Car Journal. "There are still plenty of people who have no idea what hybrids are all about-it's that much of a challenge."
Toyota has spent $91 million on measured media for the Prius since 2001, according to TNS Media Intelligence.
Mr. Cogan said GM has taken a "multifaceted approach" to hybrids that started with those so-called "mild-hybrid" Chevy Silverados last year. Earlier this year, sibling Saturn launched what it called a highly affordable hybrid, the Vue Green Line, a mild hybrid with a base price of $22,995.
A Chevrolet spokesman said the 2008 Tahoe hybrid "will be the most sophisticated hybrid in the industry, and we are going to tell people that."