In the course of research into the costs involved in a vehicle from design to destruction, there were some really interesting facts found. One is the average profits (you have to pay CNW for the details) the manufacturer makes for each category of vehicle.

	Calendar Year 2004	Calendar Year 2005	First Quarter 2006
Budget Car	$ 810	$ 837	$ 916
Economy Car	$ 825	$ 818	$ 834
Entry-level Sport Utility	$ 5,750	$ 5,439	$ 5,278
Entry-level Sport Wagon	$ 6,100	$ 6,246	$ 6,381
Full-size Pickup	$ 9,350	$ 10,867	$ 12,946
Full-size Van	$ 6,900	$ 6,455	$ 6,273
Hybrid Vehicles	$ 1,375	$ 1,486	$ 1,968
Luxury Car	$ 8,955	$ 9,148	$ 10,063
Lower Midrange Car	$ 1,250	$ 1,292	$ 1,406
Lower Midrange SUV	$ 1,100	$ 987	$ 956
Large SUV	$ 10,975	$ 10,057	$ 9,382
Midrange Sport Wagon	$ 7,900	$ 8,286	$ 9,045
Minivan	$ 5,275	$ 5,809	$ 6,227
Near Luxury Car	$ 8,975	$ 9,124	$ 9,163
Premium Car	$ 19,800	$ 21,315	$ 22,774
Premium Midrange Car	$ 9,010	$ 9,246	$ 9,482
Premium Sporty Car	$ 8,250	$ 8,671	$ 8,739
Premium SUV	$ 13,250	$ 12,776	$ 11,937
Premium Sport Wagon	$ 7,450	$ 7,669	$ 8,004
Standard Midrange Car	$ 3,860	$ 4,226	$ 4,419
Small Pickup	$ 970	$ 953	$ 969
Sport Utility Pickup	$ 7,610	$ 7,773	$ 7,851
Touring Car	$ 7,150	$ 7,226	$ 7,426
Traditional Car	$ 7,725	$ 7,854	$ 7,891
Ultra Upscale Car	$ 32,850	$ 33,441	$ 35,483
Ultra Luxury Sporty Car	$ 9,475	$ 10,044	$ 10,357
Upper Midrange SUV	$ 9,250	$ 8,967	$ 8,864
Upper Premium Sporty Car	$ 21,750	$ 21,643	$ 21,473

It is certainly clear from the table just why a car manufacturer would really rather build a bunch of premium SUVs instead of even ten times as many economy cars. For the figures of early 2006, that means about $12,000 profit versus less than $1000 per vehicle. It is no wonder U.S. manufacturers made the choice to make SUVs instead of putting research into making cars. That applies even when you look at a normal full-size pickup with a profit of over $12,000. No wonder Toyota wanted to enter that market.

The most profitable segment, obviously, is the "ultra upscale car" which is a Rolls or Bentley. With that huge profit of over $30,000 per car, everyone wants to build them. The problem is that getting very wealthy people to buy them is another matter entirely. Just look at Mercedes when they decided to enter that segment -- if the ultra S-class wasn't enough -- they brought out their Maybach. Alas, they aren't selling enough to make back the design costs.

CNW also looked at the fuel economy of all the cars in the household where a hybrid is present. It appears that it unusual for a hybrid to be the only car in the garage. This is the result of surveying over 6500 households that had a mix of vehicles used regularly and measured the average mileage for each of those vehicles. These are real-world fuel mileage, not EPA figures.

This is most interesting as it shows a very similar fleet average in households. I would like to see a larger sample, but nonetheless, this shows that their families with BMW 3-series cars have a higher fleet average than their families with Toyota Priuses. Hmmm. Fleet averages are very important, though in Los Angeles maybe lower emissions is important. That is also a reason to choose a hybrid. The important thing about this chart is that families choose vehicles for their function as well as fuel economy.

The issue also is just how much more a buyer will pay for a hybrid than a "normal" car. The survey found that buyers today are less willing to pay a premium than just two years ago. Maybe that is why Toyota is now offering discount financing on a Prius. It also found that car buyers, including hybrid buyers, wanted a car with higher fuel economy (34%), but also distinctive styling (39%), but interestingly "makes a statement about me" (31%). These days, however, the buyers aren't all that interested in new technology (just 18%).

I will end with an interesting story told to CNW when they were doing their research:

Toyota and GM decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese team won by a mile.

The GM people, very discouraged and depressed, decided to investigate the reason for the crushing defeat.

A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was that the Toyota team had 8 people rowing and 1 person steering, while the GM team had 8 people steering and 1 person rowing. So GM management hired a consulting company and paid them a large amount of money for a second opinion.

They advised that too many people were steering the boat, while not enough people were rowing. To prevent another loss to the Toyota team, the GM team rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the "Rowing Team Quality First Program", with meetings, dinners, and free pens for the rower. There was discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices and bonuses.

The next year, the Toyota team won by two miles.

Humiliated for the second time, GM management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was outsourced to India!