Hybrid rebates not working, study says

AP FILE PHOTO

Kia unveiled its first hybrid, the Forte LPI Hybrid , in July, but a Canadian study released this week suggests that government subsidies for such gas-electric vehicles are not getting people to trade in their gas-guzzlers.

A study out of the University of British Columbia has found that government rebates on hybrid vehicles aren't producing the environmental results expected.

The intention of the rebate program is to replace gas-guzzling SUVs, trucks and vans with the smaller, more fuel-efficient vehicles.

Instead hybrid sales have come at the expense of smaller, gas-sipping cars, according to study co-author Ambarish Chandra, a professor at the UBC Sauder School of Business.

The study also found that most of those who did buy a hybrid weren't motivated by getting cash back from the government and had been planning on buying them with or without rebates.

The B.C. government rebates doubled to $2,000 in 2005 and the Ontario government recently increased its rebate to a maximum of $10,000 per hybrid, but Chandra says the study found the inefficiency of the rebate programs actually rise when governments increase rebates.

He says governments could get greater environmental benefits by buying carbon offsets or investing in green jobs and technologies.

New Toyota sports car coming

Toyota will produce a fun but affordable sports car as the world's largest automaker seeks a return to profitability with vehicles that meet customers' desire for fuel efficiency without sacrificing style, company president Akio Toyoda said this week.

Toyoda announced plans for the new car – a joint venture with Subaru – while outlining his strategy for reversing the company's sales and income slide and charting a long-term course designed to appeal to new generations of motorists.

Despite Toyota's reputation for high quality and fuel efficiency, company officials acknowledge a need for more stylish vehicles to attract U.S. buyers – especially younger ones.

Toyoda, 53, described himself as a "car nut" and race driver who loves the feel of a car on the open road.

"I want to see Toyota build cars that are fun and exciting to drive," he said.

Without offering details, he said the planned sports car would fit the bill without being too expensive. Toyoda said that it would be launched within a few years.

U.S. to fight distracted driving

U.S. Secretary of Transportation Ray LaHood will lead a panel next month with government officials, safety advocates, members of Congress and police to discuss "distracted driving."

LaHood, citing fatalities caused by drivers sending text messages, said he wants the panel to issue a list of steps that will curb preventable accidents.

"We've learned from our efforts to get people to wear seat belts and to persuade them not to drive drunk that laws aren't always enough," LaHood said this week in a statement. "Often, you need to combine education with enforcement to get results."

A study released last week by Virginia Polytechnic Institute and State University's Transportation Institute found that text messaging while driving increased the danger of a crash or near-accident 23 times.

Talking on a mobile phone was less risky, since it let people keep their eyes on the road, the study found. Those drivers had a risk of a crash or near-crash that was 1.3 times higher than for drivers who weren't distracted.

BMW's New `green' line

BMW will launch a new class of environmentally friendly vehicles under its own brand, signalling that even premium automakers are ready to embrace electric vehicles as a mainstream product.

Without new concepts and technologies, certain carmakers "may no longer be in the market" soon after the advent of a raft of tax penalties and incentives designed to force the industry to go green, chief executive Norbert Reithofer said.

BMW's board decided to create a new sub-brand – akin to its performance "M" moniker – to label a new range of sustainable vehicles, Reithofer said this week.

The new class of vehicles could include a two-wheel model and will target commuters in large cities, BMW said.

Previous plans to consider adding a fourth brand to the group's existing Rolls-Royce, BMW and Mini marques had been put to rest, BMW said, adding the first vehicle to be launched under the new drive will be an electric car.

BMW and rival Daimler already have electric vehicles bearing the Mini and Smart brands and offer hybrid cars. But both premium automakers have so far avoided offering electric vehicles under the BMW and Mercedes-Benz brands.

Yamaha losses to deepen

Yamaha Motor Co. Ltd., the world's second-largest motorcycle maker, quadrupled its forecast to a full-year loss of 182 billion yen (about $2 billion Canadian) as the recession cuts sales in North America and Europe.

Yamaha, based in Iwata City, Japan, had previously forecast a net loss of 42 billion yen. The company had a loss of 74.7 billion yen in the six months to June.

The motorcycle maker cut its sales forecast by 12 per cent as rising unemployment and falling wages reduces demand for Royal Star cruising bikes.

Yamaha cut its forecast for motorcycle sales in North America this year by 35 per cent to 102,000 bikes and estimates it will sell 282,000 units in Europe, 8 per cent less than earlier forecast.

"Consumers are fearful and not spending on motorcycles in the U.S. and Europe," said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. in Tokyo. "Even if the economy recovers, it won't be at the same level as two years ago."

Yamaha Motor gets about 41 per cent of sales from Europe and North America.

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