Electrics, Hybrids to Star at Car Show

Some Say Emphasis on Pricier 'Green' Models Is Out of Synch With Consumers
By KATE LINEBAUGH
DETROIT—Electric vehicles, hybrids and small cars are slated to take center stage at the big Detroit auto show that opens Monday as car makers try to forget the bleak year gone by and look to the future.
Fiat SpA, Volkswagen AG's Audi, BMW AG and Chinese auto maker BYD Auto Co. all plan to show new electric vehicles in various stages of development. Nissan Motor Co. will display its small Leaf electric car that is slated for production later this year. Toyota Motor Corp., Honda Motor Co. and Volkswagen will show new gas-electric hybrids, while General Motors Co. and Ford Motor Co. plan to promote new gasoline-powered subcompacts and compacts.
But the rough year the industry just endured, which saw GM and Chrysler Group LLC go through bankruptcy and U.S. car sales fall to historic lows, won't be far from mind.

The space at the show that historically was used by GM's discarded brands Hummer, Saturn, Pontiac and Saab will hold "Electric Avenue," a showcase for electric vehicles. And for the first year in memory Chrysler won't unveil a new vehicle at the Detroit show. Instead it will display a Maserati and a Ferrari among its Dodges, Jeeps and Chryslers, a reflection of its new management under Italian auto maker Fiat.
It is far from clear that the gas-efficient or gas-free cars the auto makers are promoting will lure consumers away from their large rides. The electric and hybrid models cost much more than similar gas-powered versions, and many consumers have moved back to larger vehicles after flocking to small cars during the brief period when gas hovered around $4 a gallon in 2008.
Last year, hybrid vehicles, which have been sold in the U.S. for 10 years, accounted for just 2.7% of all vehicles sold in this country, according to Autodata Corp. And sales of small cars fell last year from 2008, while sport-utility vehicles gained just under four percentage points of market share, according to Autodata.
"We are really seeing more and more vehicles available in smaller sizes," said Rebecca Lindland, an analyst at IHS Global Insight. The risk for car makers is that they aren't seeing "significant changes in consumer demand for those vehicles."
A report released Thursday by Boston Consulting Group cast doubt on the mass appeal of electric vehicles unless there is a major breakthrough in battery technology, which still costs too much to make such vehicles widely affordable.
The consulting firm estimates that fully electric vehicles will make up just 2.8% of the global market in 2020, while hybrids and range-extended vehicles—which use a small gasoline engine to recharge the batteries—will account for 23%.
Even so, car makers are charging ahead with electric-vehicle plans. GM on Thursday started production of the lithium-ion battery pack for its range-extended Chevrolet Volt, and the company's board is weighing an earlier launch of the long-awaited vehicle, said people familiar with the discussions.
The Volt initially was expected to come out late this fall, but the first cars could be on the road by late summer or early fall, these people said. An earlier launch would involve few vehicles and would likely be on a lease basis or involve a corporate fleet.
GM is seeking to beat to market the Leaf from rival Nissan, which is slated to go on sale in December, according to people familiar with the discussions.
The company may also be able to sell the Volt at less than the expected $40,000 price tag, Jon Lauckner, GM's head of global program management, said Thursday.
Others that are joining the electric-vehicle movement recognize their mass-market potential may be limited. "It is popular at the moment to think battery-powered cars hold the solution. We have a long way to go before it is a reality," said Johan de Nysschen, head of Audi's North American operations.
Mr. de Nysschen expects the electric-vehicle market to be bifurcated. At one extreme will be compact, light commuter vehicles with short driving ranges. At the other end will be high performance cars that command a high price to help recoup their investment costs.
Audi's first electric vehicle will fall in the latter category, according to a person familiar with the plans.
BMW, which put out a limited fleet of two-seat electric Mini Coopers last year, plans to display at the show a four-seat BMW electric concept car based on its 1-Series that will be leased to fleet customers next year. Rich Steinberg, BMW North America's manager of electric vehicle operations and strategy, said consumer anxiety over the limited range of all-electric vehicles continues to be a stumbling block.
Amid all the buzz ahead of the Detroit show, car makers continue to question whether auto shows are effective marketing tools.
"I asked a question: do we sell any cars though the auto show?" General Motors Chairman Edward E. Whitacre Jr. told reporters this week. "Nobody had an answer to that. But I guess we do through the cars and the media. It's certainly important from a perspective of who is the new GM." —Sharon Terlep and Jeff Bennett contributed to this article.
Write to Kate Linebaugh at kate.linebaugh@wsj.com