Tale of Two of Carmakers

Electric Car Companies
Electric Car Companies

Honda, after its losses from the recent earthquake in Japan and flooding in Thailand, is clearly on the rebound. On the other hand, Coda Automotive is on teetering on the edge of financial problems that is affecting its manpower complement.

In a recent statement, Honda has opened its Marysville, Ohio plant to begin assembly of the 2014 Honda Accord Hybrid within 2013. The Accord Hybrid is the redesigned 2013 accord but utilizes the more complex plug-in hybrid propulsion system. The vehicle would go on sale by the fall, according to Honda spokesperson Ron Lietzke.

The Marysville plant is currently manufacturing the Accord Coupe and Sedan, together with the Acura TL. There are 4,400 employees in the plant and an additional fifty employees as well as an increase of US$23 million in investments.

There are two other hybrid models currently being built in the United States, namely the Civic Hybrid and the Acura ILX Hybrid, both in the Greensburg, IN. The first Accords were built in the Marysville plant back in 1982 amidst skepticism from consumer experts as to the capacity of American workers ability to meet the high quality demands of the vehicle. This was clearly addressed after a number of reliability studies have shown that it was the assembly methodologies that created the quality vehicle and not the nationality of the workers. Overall, there are four plants for Honda in the state of Ohio employing 13,500 individuals and comprising nearly U.S. $800 million in total investments in the country. In these plants engines and transmissions are built, as well as the research and design center where engineers can design new models.

This is a far cry from the landscape that Coda Automotive is currently in. Last December 26, 2012, the company announced through its Facebook page that its Coda Experience Center, located at the Westfield Mall in Century City, would be closed down. This was soon followed by layoffs last January 4, 2013, after laying off fifteen percent of its total staff last December alone.

In a statement, Coda said, “(Coda) furloughed a number of employees as the Company takes necessary action to bolster its financing and better position the business going forward.” It added, “The Company has kept in place a sufficient number of staff to keep the Company operational and remains committed to the continued development and distribution of its products.”

The company reassured that it will continue to provide services to its dealers and customers and termed that this is “a temporary action to allow the company to strategically direct resources towards critical operations and put the Company on a more sustainable path.”

Alternative Fuel Cars Need Time to Pay Off

eastshore_freeway
eastshore_freeway

As many more individuals purchase hybrid or electric cars, they have become savvy with the technology. In the face of ever increasing gas pump prices, many have started to compare their mileage with the costs.

With the comparison, many have become satisfied with their initial investments. This trend is ever increasing as many more Americans are looking for a fuel-efficient vehicle to help in easing with the difficulties because of increasing fuel process. With the many options and opportunities available in the market today, this has become a reality because hybrid and electric platforms offer “eco” or “super fuel economy” packages, even with standard internal combustion engine vehicle.

According to the latest data compiled by the New York Times and TrueCar, the option of choosing vehicles that offer better mileage through the latest technologies does not mean money is saved. Only two hybrid models, namely the Toyota Prius and the Lincoln MKZ and the Volkswagen Jetta TDI, a diesel-powered vehicle has provided new technologies that can allow an average driver nearly ten years to save money. This is a better alternative compared to current internal combustion engine cars.

At the current pump prices, some as high as US$4 and may even reach up to US$5 a gallon. In order to achieve its pay return, gas would have to reach US$8 per gallon and it would take six years to achieve the investment returns.

Many analysts identify the added cost of the new technology as a factor in limiting the ability of alternative fuel cars to reach a greater mass audience. With hybrid sales increasing by more than sixty percent this year, they still account for less than three percent of total auto sales. Plug in cars on the other hand, has a smaller fraction of the market. Proof of this was the temporary halt in production by General Motors of its flagship Chevrolet Volt.

According to the same figures, the Prius and Lincoln MKZ would produce overall savings within two years compared to similar cars with the internal combustion engines from the same brand. Other hybrids though, despite claims and ratings between eight and twelve miles to the gallon compared to other models. The hybrids though cost more and need to be driven for five years before returns are found. These figures assume that the distance traveled was US$15,000 miles and the gas price would be just under $4.00 per gallon.

The figures, when adjusted to US$5 per gallon, would have differing results as to payback periods. The hybrid Ford Fusion, compared to the conventional Fusion, would just be six and a half years, and eight and a half years at US$4 per gallon prices. At US$6 per gallon, the hybrid Toyota Camry, the Hyundai Sonata and the Kia Optima would create returns within just four years.

Electric Car Sales Rising in UK and US

Chevrolet Volt
Chevrolet Volt

This new product, the electric vehicle, is still in its infancy and data that has been made available by automakers are still scarce. While large automakers such as GM and Nissan have readily provided sales information, smaller electric car manufacturers such as Tesla, Smart, Wheego and GEM have not provided information to complete the sales picture for this revolutionary vehicle.

The top sellers of electric vehicles are the Chevy Volt and the Nissan Leaf. The design of the Volt is still basically hybrid in nature, as there is an internal combustion engine in the unit, connected to the drive train that extends the range of the vehicle. On the other hand, the Nissan Leaf is a fully automated electric vehicle powered solely by lithium ion batteries.

In June 2011, there have been 1,708 Nissan Leaf units have been sold. For May 2011, Nissan was able to sell 1,142 units. As for the Chevy Volt, there were 561 units sold in June 2011 while in May, there were 480 units sold. These numbers were the units sold over a two-month period in the United States. In total, over 3,894 units of Nissan Leaf have been sold since it was made available to the US market in December 2010.

Across the pond, UK electric car sales have been dominated by the Nissan Leaf. Once made available to the UK market in March 2011, an average of one hundred units have been sold per month totaling 338 individual units until June 2011. The smaller numbers is not due to the non-acceptance of Europeans of the new car design but rather attributed to the lack of supply available of the cars in the UK market.

These numbers are just the tip of the iceberg and is a precursor to a much larger demand in the future. The waiting list for electric cars now number in five hundred in the UK alone and the numbers are rising. While the numbers for electric cars seem to be a trickle compared to the thousands of internal combustion engines being bought off showrooms in both the U.S. and the UK, this is a good sign that the market for electric cars and hybrids is healthy and kicking.

Soon enough, the numbers would change.