For the first time, an American automaker plans to sell a hybrid car for the same, lower price as its gas-powered counterpart, removing at least one obstacle for drivers who want a greener ride.
At a little more than $35,000, the 2011 Lincoln MKZ sedan won’t be cheap, but the decision by Ford to match the prices of the two styles could lead competitors to follow suit with future models.
The hybrid MKZ, debuting this fall and running on both gas and electric power, will be a bargain after factoring in savings at the pump. It gets more than double the mileage of the traditional version in city driving.
“One of the things we heard from, particularly luxury customers is they wanted a choice,” says marketing manager Chantel Lenard. “We viewed this as a new opportunity to bring customers to the Lincoln brand.”
While automakers won’t reveal what they spend to install a hybrid system in a car, the final product usually costs several thousand dollars more than a gas-powered version of the same car.
The Lexus HS 250h, the MKZ’s closest competitor, costs about $2,500 more than the Lexus IS, a similar, small, gas-powered sedan. Ford charges $8,840 more for the hybrid version of its Ford Escape SUV.
The MKZ can still make money even if Lincoln doesn’t charge more for the hybrid, said Erich Merkle, president of the consulting company Autoconomy.com. Luxury cars are sold at a significant premium, he said, ensuring a profit for Ford. Lincoln can also borrow the hybrid system from the Ford Fusion, its corporate twin, and save on development costs.
Even though the hybrid version of the MPG has a city fuel economy rating of 41 miles per gallon, Ford believes quite a few customers will stick with the conventionally powered MKZ, with its more powerful 263 horsepower engine.
“We think some will continue to stay with the conventional powertrain, will be looking for more of the conventional power of our V-6 engine,” says Lenard. “While some will want to really make a difference in the enviornment, as well as get better fuel economy.”
Other automakers may not try to match Lincoln’s move if it is limited to the MKZ, but they will have to take notice if Lincoln uses the same strategy with future hybrid models, said Aaron Bragman, an analyst with IHS Automotive.
Lincoln is also trying to make up for the sales it is losing by phasing out its Mercury brand, which includes two hybrids.
The MKZ is one of most popular Lincoln models, but its sales have fallen 5 percent so far this year.
(Copyright 2010 by The Associated Press. All Rights Reserved.)