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Hybrid vehicles have the spotlight but automakers see alternatives

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By Steve Mertl

VANCOUVER (CP) _ Green is this year's colour at this week's Vancouver International Auto Show but the road to Earth-friendly motoring turns out to be a twisty one.

Automakers have greeted the federal government's new program of rebates for lower-emission vehicles and tax levies for gas guzzlers with a mixture of praise and bemusement.

While gasoline-electric hybrids get the biggest breaks, industry executives question which cars get the break and point out other fuel-saving technologies potentially have a much bigger impact.

``We don't think there's a silver bullet,'' says Lindsay Duffield, president of BMW Canada.

``You'll have some manufacturers saying it's going to be ethanol E85 and some hybrids and some diesels.''

And there are still gains to be made with conventional internal-combustion engines, says Duffield.

The government's ``feebate'' announcement apparently caught the industry off guard

Small hybrids get the biggest rebate _ $2,000 _ which when combined with provincial rebates in several provinces helps erase the price premium hybrids carry.

Despite their current sexiness, hybrids account for only about one per cent of the 1.5 million cars and trucks sold annually in Canada.

For example, of the top-selling 25,542 Escape SUVs Ford sold last year, 617 were hybrids.

European automakers have been leery of hybrid technology, compared with their North American and Japanese competitors.

While BMW is collaborating with DaimlerChrysler and General Motors on hybrid technology, Duffield believes the cost-benefit equation is doubtful for consumers.

``Your average customer's not going to pay a huge premium,'' he says, adding that if you subtract the rebates, drivers will never recoup the extra cost in fuel savings.

The business case seems shaky too, Duffield says, until volumes rise to the point they are as profitable as their conventional counterparts.

Toyota, which made an early and strong commitment to hybrids that now runs to six models, mitigates the cost issue to some extent in its luxury Lexus line, where Hybrids now make up 20 per cent of sales.

Lexus also pitches its hybrids for their performance virtues _ superior acceleration through its electric-motor assist _ as well as fuel economy and eco-friendliness.

Lexus Canada director Stuart Payne says the government's rebate program won't be a huge factor in the higher-priced segment.

``But I think it's going to play a larger effect on some of the lower (priced) smaller cars, the (Toyota) Yaris, for instance and the Prius,'' says Payne. ``We'll see a lot of switching from regular gas Camrys to Camry hybrid.''

The low-priced segment shows up the program's flaws, says Duffield. The fuel-economy cutoff chosen by Canada Revenue Agency arbitrarily eliminates many fuel-efficient vehicles.

``A thousand dollars on a $15,000 car is huge,'' he says. ``In that end of the market, it's certainly causing a lot of controversy and a lot of issues.''

The man who puts together Ottawa's EnerGuide fuel-rating guide wouldn't comment on how the cutoff was determined.

''A line in the sand had to be drawn,'' said Charles Crispim, senior manager for the EnerGuide vehicle program at Natural Resources Canada.

General Motors is covering its bases with two kinds of hybrid systems, as well as flexible-fuel vehicles that can use low-emission ethanol blends and electronics that seamlessly disengage half the cylinders in V-6 and V-8 engines during steady driving.

The latter low-cost solution has likely saved more fuel than the entire fleet of hybrids currently on Canadian roads, says Matt Crossley, GM Canada's director of engineering and product planning.

The Europeans see as much, if not more promise in clean-diesel engines, which can deliver 30 per cent better fuel economy and lower carbon dioxide emissions.

Thanks to lower taxes on diesel fuel and diesel-powered cars, roughly one in two cars sold in Europe are diesel models _ in some countries much higher.

Stringent new diesel-fuel standards in North America now make modern diesels _ no longer the pokey, smokey cars of the past _ a realistic alternative for Canadian and American drivers, says Arden Nerling, marketing services manager at Mercedes-Benz Canada.

``All the things that people may have not liked about diesel don't exist anymore,'' says Nerling.

Mercedes is sharing its BlueTec diesel technology _ which includes things like a more sophisticated catalytic converter to clean tailpipe emissions _ with its corporate partner Chrysler.

BMW plans to offer its European high-performance diesels here in the upcoming model year.

``Obviously diesel technology is proven,'' says Duffield. ``We know that is a winner and that will work well.''

Domestic automakers also see a future for diesel cars here but point out Canadian diesel fuel and emission standards now eclipse Europe's, which means some tweaking will be necessary for vehicles to comply.

Fuel pricing and taxes also affect buyer decisions.

``It's really the economics that drive some of those choices,'' says GM's Crossley.

``I think hybrids have the lead in North America. I think there may be a place for both.''

The last word goes to Crispim, who drives a Volkswagen Jetta diesel.

``I think we'll definitely see a big increase in diesels in the future,'' he says.

``We've got long distances between cities. There's no better place for a diesel-type application than Canada.''

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Hybrid vehicles have the spotlight but automakers see alternatives
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