Brand Relevance: Making Competitors Irrelevant - always yours

MARKET DYNAMICS IN THE AUTOMOBILE INDUSTRY 101
away from the electric car. 1 The year 2006 was a time when GM
was making a big bet on another electric car, the Chevrolet
Volt, introduced in 2010.
Back to the hybrid story. In 1993 the Partnership of a New
Generation of Vehicles (PNGV) was formed, stimulated in part
by the work of Vice President Al Gore and by the CARB regulations.
A research program designed to develop 80 mpg cars that
run clean brought together the three U.S. auto manufacturers
(therefore excluding Toyota and the other foreign makers) plus
some eight federal agencies and several universities. The intent
was to jumpstart the technology development so that internal
combustion engines would have a viable, clean - air competitor.
Nearly $ 2 billion were invested, nearly half of which was paid
by the government.
Diesel hybrids emerged as the best option after a variety of
other paths were pursued to achieve the goal. All three manufacturers
met or came close to the mileage claims with diesel -
battery hybrid cars that were estimated to cost from $ 3,500 to
$ 7,500 extra to make in production quantities. Despite that success,
the program was terminated by the government in 2002
and replaced by one termed Freedom car, which focused on cars
powered by hydrogen, a technology favored by GM, and which
all agreed was the ultimate solution but was at least a decade
away and probably much more.
Why didn ’ t one of the three U.S. manufacturers use
the diesel hybrid technology as a springboard to create and
dominate the diesel hybrid area? The explanations are illuminating.
First, the technology may not have been fully in place.
In particular, the battery, a key component, was a barrier
to mileage range and cost. A new battery technology that
reduced the problem, the NiMH, only emerged in 2000 after
the decision by the auto companies had been made to give up the
chase. Second, the prototype cars, perhaps due to a spec mix - up,
did not meet the current target level of emissions. So more
work was needed. Third, in the small - car market, in which