How Green Is My Automaker?

Increasingly car manufacturers are drawing attention to their environmental efforts in their advertising and marketing. This ranges from commercials featuring experimental hydrogen cars to the latest hybrid models.

Given that hybrids remain a small part of the overall market and hydrogen power is still in the testing phase, why are manufacturer’s emphasizing them so heavily in their promotions to the public?

One reason is that it translates into increased sales of their entire line. A new BuyingAdvice.com survey shows that a majority of new car buyers pay attention to the environmental stance of car manufacturers when they are considering a vehicle purchase.

Sixty percent of the poll sample said that they felt that the “green-consciousness” of a manufacturer was an important part of their vehicle buying decision.

Marketing experts say that the “green-consciousness” component is part of an overall brand image that helps differentiate one brand from another.

“While the direct sales of hybrids and other ‘green friendly’ vehicles may not justify the advertising spend in itself; all the other vehicles in the line benefit from the positive feelings generated toward the brand,” says retired dealer Earnest Jordan.

“In a crowded marketplace, brand image is very important. Increasingly, environmental awareness has become a necessary part of that image,” he says.

The survey asked buyers to name who they considered the most environmentally conscious manufacturer. Honda topped the list in a virtual tie with Toyota, with both brands selected by over 35 percent of the sample, 35.8 and 35.2 percent respectively. GM lead the domestic brands with 14 percent while Ford was the choice of nine percent. Nissan was only selected by 5 percent of the 2,369 buyers questioned for the study.

In many cases, there is clearly no conflict between good business for the manufacturers and increased environmental awareness. One clear-cut case is the general trend toward building the more fuel efficient cars that the market is now demanding.

But, there are other situations where manufacturers have to decide between their environmental commitment and broader business implications. For example, when faced with recent Congressional moves to increase the required fuel economy of future vehicle fleets, Toyota and the major domestic manufacturers chose to unite in opposition to the legislation. Toyota and domestic automakers chose this stance despite the risk of receiving negative public attention in relation to their environmental commitment-which was questioned by both the media and environmentalists.

The legislation that was passed, despite opposition from most manufacturers, will require automakers to increase their vehicle fuel efficiency by 40 percent to an industry average of 35 mpg by 2020. This new average will include passenger cars, SUVs and small trucks and will have to be raised significantly from today’s current average of 25 mpg.

The auto mileage requirement has not changed since it was first introduced in 1975.

“I think like most big business, the manufacturers would always choose self regulation over a legislative edict, and they decided that they had to oppose the legislation,” says Jordan.

“The proposal does not come into full effect until 2020. So the companies were being asked to commit themselves to act in a particular way without knowledge of any of the market conditions that they will face at that point. Though they expressed support for the general principals of producing more fuel efficient vehicles, they also said they were concerned about the cost implications for consumers and the employment prospects for the industry as a whole,” he added.

Some may think that the increased fuel efficiency mandate would not have phased Toyota, as they already produce a range of fuel efficient vehicles and the world’s best-selling hybrid. But recently, Toyota has made expanding their truck market share here in America one of their top priorities. And producing more trucks could have a large impact on their fleet’s overall fuel efficiency.

According to our poll, Toyota’s decision to oppose the change in the fuel efficiency standards did not have a profound negative impact on the public image of the company’s environmental stance. Sixty four percent said that it had not changed their view of Toyota while 35 percent said that it had. Only 44 percent of respondents said that they were even aware of the opposition to the legislation by the Detroit 3 and Toyota.

Participants in this poll were drawn from among the over 50,000 new car buyers that visit BuyingAdvice.com each month.