Not too long ago, Toyota reigned as the seemingly untouchable hybrid leader. That dominance — in terms of both market share (50 percent of hybrids sold in the U.S.) and mindshare (no alt-fuel vehicle on the market is better known or more widely recognized than the Toyota Prius) — means that as the Prius image takes a beating, other models across the spectrum of green cars will also get bruised.

Mike Omotoso, senior manager for J.D. Power and Associates’ global powertrain unit, told me the firm plans to lower its hybrid and electric vehicle forecast for 2010, although it has yet to determine how big the hit will be. For the first two months of this year, the hybrid share of light vehicle sales hovered at around just 2.3 percent, compared to 2.8 percent for all of 2009 and 2.4 percent in 2008, according to Omotoso. That’s due to a number of factors — including high unemployment, a weak economy and the biggie: gas prices. But the Prius and its technical troubles loom too large to ignore.

Prior to 2009, the Prius’ share of U.S. hybrid sales had slipped below 50 percent only once since 2005 — in 2006, when it dropped to 42 percent. But even that offers a sign of Toyota’s dominance in the hybrid space. Omotoso explained that 2006 marked “the first year for the Camry hybrid and the first full year for the Highlander hybrid. So other Toyota models cannibalized Prius sales.”

Regulators are only beginning to look into the most recent incidents. But initial reports suggest the problems may not have been linked to a floor mat that pinned down the gas pedal in other Priuses and prompted Toyota to issue a recall last year for 2004-2009 models of the hybrid. Last month, when problems surfaced with the regenerative braking system of some 2010 Prius models, Toyota attributed them to a software glitch.

Regardless of what investigators and Toyota may turn up if they check out the cars involved in this week’s incidents more closely, however, one thing’s already clear: Videos that zipped around the web and TV news shows this week of a visibly shaken driver, and quotes from the 911 call he made during the 23 minutes that his 2008 Prius hurdled at high speeds down a Southern California highway before a highway patrol officer helped him stop, aren’t helping to repair the reputation of either Toyota or advanced vehicles.

Given the Prius’ status as the poster child for hybrids, Omotoso explained, “consumers might think that if the Prius has a problem then all hybrids might be dangerous.” That concern creates one more obstacle for new vehicle technologies to penetrate the mainstream, as some car buyers may forgo experimenting with the next generation of green cars — among them plug-in hybrids and all-electric vehicles from General Motors’ Chevy Volt and Nissan’s LEAF to BYD Auto’s e6, Coda Automotive’s Coda Sedan and Fisker Automotive’s Nina — rolling out over the next few years.

That perception problem is a hurdle that many car makers can’t really afford in this nascent market. Plug-in vehicle developers are competing for a niche that’s likely to remain quite small for years to come. Nearly a decade after the Prius debut, hybrids still hold a single-digit sliver of the pie. And despite optimistic projections from investors like Warren Buffett, who has said he expects all cars will run on electricity by 2030, other forecasts suggest significantly slower adoption, mainly due to high price tags.

Lux Research forecasts that even if oil costs $200 a barrel in 2020, just 4 percent of vehicles sold globally will be all-electric or plug-in hybrid because of the high costs of the battery technology. According to Lux, plug-in hybrids could sell 3 million units per year by 2020 if the price of oil reaches those heights, while hybrids can be expected to sell that many by 2020 regardless of oil prices.

In addition to presenting a challenge to companies vying to win over consumers to advanced vehicles, Toyota’s ongoing troubles also highlight a need for the government, the auto industry and even drivers to collect and manage (or in the case of drivers, to file), vehicle safety data and complaints in a more open and timely manner. Noting in prepared testimony that regulators and Toyota had received complaints of unintended acceleration in Toyota models seven years ago, Consumers Union is issuing that challenge – to increase transparency of vehicle safety data – in a hearing this morning on the National Highway Traffic Safety Administration’s oversight operations. As much as technology may be part of the problem with Toyota’s vehicles, it could also be part of the solution — helping identify problems before too many drivers are put in the situation of having to call 911 from behind the wheel of an out-of-control car.





[gigaom]

Applying a green lens to your efforts not only increases profits but also opens up new product lines

We think writing about our company is ridiculously narcissistic, but if you indulge us for a moment, we'll make a couple of points that can help you and your business. Here goes. We recently acquired Change, a Vancouver-based consultancy focused on creating and branding green products and services.

"Why?" might seem like a no-brainer, but the environment isn't the only reason to turn eco-friendly. True, green is good for the consumer and our planet, but sustainability makes for a key driver of innovation and carries a huge competitive advantage.

Let us tick off three reasons, starting with the intangible and working our way to the extremely tangible—and potentially even more profitable.


Reason No. 1. It makes no sense to sail against the wind.

You already know that all things being equal, consumers prefer green companies. And you probably understand that consumers are behind the governmental push toward mandating companies become more environmentally responsible. The upshot: You are going to have to go green. The only question is when. Our recommendation? It is always better to have the breeze at your back.


Reason No. 2. It can save you a lot of money.

Although some companies still see an eco-friendly overhaul as an added cost of doing business without any substantial financial benefit, that thinking is, for the most part, passé. Adding a green tint to your business doesn't have to cost more. Simply using fewer materials to make your products constitutes "going green," and also cuts costs. Moving production closer to where the products are consumed counts as another example of going green—that's what the whole movement toward eating locally grown foods is all about—because it saves on transportation costs. Heck, even Wal-Mart's (WMT) vow to reduce energy in its stores qualifies as going green.

You probably know that former GE (GE) chief Jack Welch is often called the greatest CEO of the last century. But for all the accolades he received, those handing out plaudits missed a huge one: He was the King of Green. After all, Six Sigma, the management style he championed, is all about getting leaner: reducing steps, costs, and materials. Lean is green.


Reason No. 3. It's not that hard to apply a green lens.

For us, this ranks as the most exciting reason to go green. It gives you a new way of looking at the innovation process.

Let's say you're in the flooring business. You think about competing on price, selection, kinds of materials, and all the other usual stuff. Now add a green lens. "Hmmm. What kinds of materials are easily renewable? Well, bamboo leaps to mind. I wonder if people would buy bamboo floors." The answer is "You bet." The material costs less than most kinds of wood and looks just as attractive. It's a win for you, because you have a profitable new product to sell. And it's a double win for consumers, who end up with a product they like and can feel good about because they made an environmentally smart decision (even if they didn't spend one single second thinking about the environment when they were considering bamboo).

Another example: outdoor "flooring" like decks made by such companies as Trex (TREX). As Trex points out, its products are "made from about 50% recycled and reclaimed plastic and 50% reclaimed wood. These materials would otherwise go unused in landfills."

That's good, of course. But what appeals to most consumers even more is that Trex's materials last far longer than wood—which tends to rot—and don't need constant maintenance. (If you have ever stained a deck on a hot summer day, you understand why that is important.)

We believe integrating sustainability into the everyday fabric of operation and embracing Conscious Capitalism—the idea that an organization has an obligation to act in not only its own best interests but also those of all its stakeholders—spur long-term growth. In 2010 and beyond, the creation of sustainable products, services, and business models that respond to consumers' unmet needs will drive profit. Companies that do good will, in turn, do well. And companies that refuse to comply with environmental standards and respond to consumer concerns will see punitive results.

So why wait? Looking at innovation through an additional lens—one that is green—can help you come up with a broader range of profitable products and services to make your customers happy.


[businessweek]

There's no denying the popularity of iTunes — it could be said that iTunes single-handedly took down the record store business model. But think about it. iTunes isn't even a website that you can surf from anywhere. You have to have iTunes loaded onto a computer (or iPhone) before you can buy tunes.

Apple is planning to launch iTunes.com, or iTunes in the cloud, a web-based portal into the store. This will be great for everyone. It will be more convenient for users, who will no longer be tied to a specific computer. It could bring about a huge boost to Apple, who'll be able to link to other websites for one-click shopping for songs. Similar to how you can buy a song used on YouTube from Amazon's music store, imagine listening to Pandora and with one click, purchase a new tune from iTunes. Until this launches, you've still had to launch iTunes on your computer first. This will be uber-easy.

The cloud-based iTunes.com could launch in just a few months. Will you move your library into the clouds?

[dvice]

How eBay is working to get more on-time Christmas deliveries and shed its yard-sale image

Ten days before Christmas, Patricia Curry placed two online orders for last-minute gifts. A GPS device for her mother arrived from Best Buy (BBY) with days to spare.

With time running out, Curry was still waiting on Dec. 22 for the CD she ordered for her husband from eBay (EBAY). "Sometimes on eBay you just don't know what you're getting," says Curry, a resident of Frazer, Pa.

Her assessment speaks to the order-fulfillment problems bedeviling eBay in the heart of the holiday selling season. As auction sales of secondhand goods have dwindled and large liquidators of new products have moved in, the e-commerce pioneer finds itself competing more closely with Amazon.com (AMZN) and Wal-Mart (WMT). It also means eBay doesn't have as tight a control of its supply chain as rivals. "Amazon has seen a lot of growth because of its practices that put the consumer first," says Colin Sebastian, an analyst at Lazard Capital Markets. "It's difficult for eBay, which is not a retailer, to compete."

EBay's expansion into selling new products has brought in more customers who expect cheap, fast delivery; flexible return policies; and attentive customer support. Those have been tough demands for the company to achieve, and could be affecting the site's popularity. In November, eBay's online visitors dropped by 8%, to 51.2 million, compared with a year earlier, according to Nielsen NetView. During the same period, Amazon's visitors rose 6% to 60.9 million.

Now, working with its patchwork of sellers, San Jose-based eBay says it's speeding delivery times and improving service. In the past year, the e-commerce company has created new incentives for its sellers to improve fulfillment, offering financial discounts and better placement in search results on the site to merchants who get the best ratings from customers.




Reliability Goal

In September, eBay added shipment tracking codes for merchants to use on the site. That gives sellers a way to prove they shipped a package on time in cases where a delivery service like FedEx (FDX) or UPS (UPS) is late. "This is part of the whole picture of [eBay] getting more involved and more controlled like Amazon," says Dan Mordente, an eBay seller since 1996.

It's also part of Chief Executive John Donahoe's plan to increase the perception among shoppers that eBay is a reliable destination. "I've got investors who are really pushing us to market [the new incentives] aggressively this fourth quarter," Donahoe said during a September interview. Instead, Donahoe plans to hold off on a marketing campaign about customer service until 2010.

Hanging in the balance is whether eBay can shed its yard-sale image and compete toe-to-toe with some of retail's biggest players. Online holiday sales have heated up as snow fell across the Eastern U.S. this week, as many consumers who were stuck at home shopped online instead. Internet sales grew 13% during the weekend of Dec. 19 vs. a year earlier, according to data released Dec.

[businessweek]