Pitching Green Cars as High-Tech

MTBMW presenting its new hybrid model, the X6 Hybrid Concept SUV, at a car show in Moscow earlier this month.
Hybrid cars might be all the rage among Western drivers worried about high gas prices and pollution. But many Russian drivers couldn't care less.

So automotive giants hoping to cash in on Russia's booming car market have settled on another selling point: cutting-edge technology.

"Russians like to buy the latest technology, so we need to introduce it to Russian drivers," said BMW Russia president Christian Kremer, who presented BMW's new hybrid model, the X6 Hybrid Concept SUV, at a recent car show in Moscow.

"Trendsetting is very important on the market," Kremer said in an interview, as the sleek silver car slowly turned on a circular podium behind him.

The crave for the newest technology is already boosting the sales of hybrid models offered by Lexus in Russia, and both Lexus' owner, Toyota, and Honda consider bringing their most popular hybrid models to Russian dealerships next year.

Hybrid cars use a rechargeable electric battery in addition to the conventional gasoline engine. The engine is programmed to regulate usage of both systems, usually turning the conventional engine off while idling and driving slowly in traffic. The technology allows more efficient gasoline usage and low emissions of carbon dioxide, which are two main reasons behind the popularity of the cars in Europe and North America.

The availability of new hybrid cars is extremely limited in Russia, but demand among a mostly young, well-off crowd is creating a market for used hybrid cars from auctions in Japan and the United States. Eager to try new technology and stand out from the crowd, these Russians are paying more than $25,000 for three-year-old Prius cars -- $3,000 more than what the cars cost brand-new on Toyota's U.S. web site.

"It's an unusual and very modern car that [attracts] interest among younger people who like to try new things," said Andrei Chumakov, a Moscow businessman who created a web site, http://prius.ru, for his U.S.-built car, which he bought a year ago. The web site now has 1,300 registered users who engage in Prius-spotting around town and advise one another on how to fix up their hybrids.

Vladimir Filonov / MT
Sales of Lexus hybrids are increasing, even as sales of regular sedans fall.
"It's like a drug for some drivers. When the computer switches between the engine and the electric battery on the road, it feels like you are driving a robot, so it's popular among people who like racing simulators," Chumakov said.

Since the Prius is not sold at Toyota dealerships, maintenance is only available at independent repair shops that have managed to figure out the car's computer system, which regulates the engine.

Chumakov estimated that there are 400 Prius cars in Moscow.

Toyota is considering starting official Prius sales in Russia next year. The carmaker is now researching Russian roads, weather conditions and fuel quality, which will all determine whether Russia is ready for the Prius, Toyota spokeswoman Tatyana Rusakova said.

Prius sales in Japan and the United States, which have skyrocketed in recent years, have cooled off this year amid the global economic slowdown and the limited availability of new vehicles.

Interestingly, sales of conventional LS and GS Lexus sedans have declined in Russia since last year, by 16 and 58 percent, respectively. But sales of the GS hybrid have increased by 12 percent to 261 units over the first six months of this year, compared with the same period last year, and 285 LS 600 hybrids, available since late last year, were sold from January through June, according to company figures.

The United States is by far the largest market for hybrids, responsible for 66 percent of hybrid sales, according to a recent report by R.L. Polk and Co., an industry analytical firm. Hybrids account for about 2.4 percent of the global vehicle market and rising, as gasoline prices continue to climb and governments offer incentives for fuel-efficient vehicles with low carbon dioxide emissions.

Honda, meanwhile, plans to introduce its popular Civic Hybrid to Russia next year. Honda spokeswoman Yekaterina Nikolayeva said drivers would need to be educated about the advantages of hybrids but saw no specific barriers to their success here.

"Although it's hard to predict the success of these cars before they are more widely available, there is a huge potential for hybrids on the Russian market," said Andrei Poludnitsyn, an analyst with Alfa Bank.

He said some Russian drivers were getting ready to give up their gas-guzzling SUVs and luxury sedans.

"Gasoline prices in Russia are higher than in the United States now, so people are more interested in saving money, especially as traffic jams worsen in Moscow," he said.