The story is 50 years old, but it could be played out in the same way today.
At the 1964 World Fair in New York, General Motors exhibited the Firebird IV, a concept car with a revolutionary, self-driving technology.
At the same show, its rival Ford presented the first model in its legendary Mustang series, built to appeal to the dynamic surge of baby boomers – youthful, powerful and loads of fun.
Ford planned to build 100,000 Mustangs in that first year; in fact, 400,000 were built. But GM’s Firebird IV was never more than a test model.
The lesson of the Mustang and Firebird is still valid today: Much of what seems right and sensible in new car markets is far from a sure thing when it comes to convincing buyers.
Sales figures show the reality. About 15,000 electric cars were sold in Germany in 2014, despite their clean image, 17 models being available and pressure from the government.
Much of what seems right and sensible in new car markets is far from a sure thing when it comes to convincing buyers.
In the opposing corner are 540,000 sport utility vehicles: huge, showy and, despite recent improvements in fuel efficiency, still great gas-guzzlers. The market share of SUVs in Germany grew to 18 percent in 2014, up from 16.5 percent a year before. By 2020, every third vehicle sold in Germany will be an SUV, according to forecasts.
Buoyed by consumer enthusiasm, the car industry is vigorously supporting this trend. Next year alone, there will be 30 new SUV models on the market.
VW will introduce the new Tiguan and the smaller Taigun. BMW will come out with a new version of the small X1. Audi will unveil a much more accommodating Q7 in the luxury segment. And for the first time in Europe, Ford will offer the mid-sized Edge, which was previously marketed only in North America.
In addition, there are completely new models, such as the coupe-like GLC and GLE from Mercedes, or Mazda’s CX3, which rounds out the lower segment of the product range.
Ferdinand Dudenhöffer, a professor at the CAR Institute at Duisburg-Essen University, calculates that consumers will be able to choose from nearly 90 different models in 2015 – a third more than 10 years ago.
“The world wants SUVs, so it gets SUVs,” explained a top manager at VW.
But into this mix add the fact that the U.S. electric-car pioneer Tesla recently reported that its Roadster can travel 680 kilometers (425 miles) on one battery charge. And that the German transport minister, Alexander Dobrindt, just announced that he intends to have charging stations for electric cars at all service areas along German autobahns by 2017.
But it still is difficult to persuade customers to switch to alternative engines. Salespeople themselves are often not convinced by the new technology and, in cases of doubt, offer discreetly whispered advice to stick with the tried-and-true internal combustion engine.
That makes even more sense now that gas is cheaper than it has been in years. Volkswagen’s new gas-electric hybrid Golf GTE costs €8,000 ($9,730) more than its gas-driven Golf GTI, and the fuel saving today is simply not worth the expense of going green.
“The car companies should revamp their product offerings in order to capitalize on customer potential.”
But it is not only price that keeps customers from buying electric cars. Harald Proff, an automotive expert at Kienbaum Consultants, said the industry is not offering the right models, and could double e-car sales if it did.
“The car companies should revamp their product offerings in order to capitalize on customer potential,” he said.
Mr. Proff identified two classes of e-cars where companies should focus their efforts. One is small, battery-driven but inexpensive cars that would immediately be recognized as electric vehicles. The Mitsubishi MiEV or the Renault Twizy fit this mold, but up to now neither model has sold well.
The other type is company e-cars in the luxury class, either with an electric engine or as hybrids. German manufacturers offer virtually no models in this segment. Instead German carmakers are building mid-range vehicles such as Daimler’s B-class, the E-Golf from VW, or Audi’s E-Tron.
“This is not what interests the so-called ‘early adopters,’ who could be found in large cities or managing fleets of company cars,” Mr. Proff said.
Over the long term, experts predict less consumer interest in a single multi-purpose vehicle.
“Smaller, emission-free autos will be built especially for cities, while larger cars will be used for longer routes,” said Andreas Zielke from the McKinsey consulting firm. In practice, this would mean the small, agile electric cars for the city, and SUVs for excursions with the family on the weekend.
But one thing remains true, just as in earlier times. Manufacturers who want to be among tomorrow’s winners must stir emotions – just like Ford did 40 years ago with the Mustang.
The author covers the auto industry for Handelsblatt’s companies and markets section. To contact the author: email@example.com