Ford Increasing Hybrid Production?

The long-awaited Ford Escape Hybrid, a sport utility vehicle offering a base price of $26,380 and a fuel economy average of about 35 mpg, could follow the path of the latest generation Toyota Prius with demand significantly greater than supply. Demand for the Prius has created a backlog of more than 20,000 orders, with no immediate relief in sight. This has reportedly prompted some dealers to add thousands of dollars in premiums above the Prius' suggested retail price.

Even though the Escape Hybrid won't debut until later this summer, Ford isn't sitting on its hands while this scenario unfolds. Ford Chairman Bill Ford Jr. says the automaker may increase Escape Hybrid production beyond the planned 20,000 this year, a logical response since more than 30,000 people have expressed an interest in buying one through Ford's hybrid website (www.fordvehicles.com/escapehybrid). Increasing capacity will depend on the availability of additional Sanyo battery packs for the hybrid electric vehicle, which Ford says is being examined right now.

What's driving the supply/demand disparity? High fuel prices combined with the substantial fuel economy that hybrids achieve, of course. Clearly, today's record high gas prices hadn't been anticipated by automakers when production plans were formulated some time ago.

Plus, like Honda and Toyota, Ford is entering the hybrid field very conservatively by straddling the line between potential and prudence. The hybrid market, while potentially lucrative, remains unproved and nobody wants to see large numbers of hybrid vehicles sitting unsold on new car lots. This leads directly to conservative production runs that must be adjusted if actual demand turns out to be significantly higher than demand projections, something we're seeing unfold now.