Small 4 Cylinders vs. Hybrids

"Don't Taze Me, Bro!" ....

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SAN FRANCISCO (MarketWatch) -- Hybrid technology may be the poster boy for change in the struggling U.S. auto industry, but a cash-strapped public is leaning far more heavily on little four-cylinder engines to ease their fiscal pain, Standard & Poor's reported Wednesday. The credit ratings agency said that customer enthusiasm for pricier gas/electric hybrids has been underwhelming, with the nationwide housing slump and severe credit crunch making for the "worst year in 15 years for the automobile industry." Despite the increasing popularity of the Prius by Toyota Motor Corp., hybrids made up only 3% of the overall market for new cars last year. The sales gap between the relatively new technology and the smallest conventional engines is actually growing. "For now, the easiest, cheapest way for new-car shoppers to get better mileage is to choose a model with a conventional four-cylinder engine. And they are," said J.D. Power and Associates' Jason Rothkop. He added in a conference call that it's getting more difficult for hybrids to command a premium of up to $5,000 when customers are counting every penny. The four-cylinder engine now holds 37% of the U.S. market, up from 30% just three years ago when gas last averaged less than $2 a gallon, according to J.D. Power and Associates. Cars like Toyota's Yaris and the Fit from Honda Motor Co. don't quite stack up to their hybrid competition in terms of fuel economy, but when prospective customers mull the higher cost of hybrids, they increasingly opt for the cheaper sticker price. The quirky Yaris saw its sales surge 83% in March, and when combined with Toyota's four-cylinder Corolla, total sales almost doubled the results from Prius, which garners about half the sales across the entire hybrid market. Still, for carmakers (especially in Detroit), the battle between hybrids and four-cylinders is a tempest in a teapot when compared with what's happening to their bigger cars and trucks. S&P said that over the past three years, vehicles equipped with eight-cylinder engines saw their market share drop to 18% from 28%. V-8 engines command an $8,000 premium per vehicle over the V-6 models, while the four-cylinder models offer a $4,000 discount, on average. That's a lot of profit out the door for domestic automakers who count on these fuel-quaffing behemoths to fatten their bottom lines.