Mark Winslow, Ford Motor Co. of Australia sales and marketing director, has concerns regarding the global rush to hybrid-electric vehicles as oil prices continue their meteoric climb, questioning HEVs’ appeal to the fleet buyers that dominate Down Under’s domestic market in the medium- and large-vehicle segments.

Winslow makes his remarks as interest in alternative-fuel technologies heats up in the wake of Toyota Motor Corp.’s recent decision to build the Camry Hybrid in Australia.

Additionally, the federal Labor government says it plans to provide the industry with a A$500 million ($479 million) subsidy to build more environmentally friendly cars.

But not all auto makers are convinced hybrids are the answer.

Winslow tells reporters at Ford Australia’s monthly media briefing the key figure in any corporate-leasing deal is the vehicle residual value.

“What residual value is the fleet-management organization going to put on a hybrid after three years?” he asks.

“Who will be the customer for a 3-year-old hybrid? Is the used-car buyer going to say, ‘Yes, I’ll go with that,’ or are they going to jump the other way and look for a (liquefied-petroleum-gasoline) Falcon?”

Winslow says it took 10 years for the LPG Falcon to gain ready public acceptance. “Will there be a similar gestation period (for HEVs), with concerns over the cost (and) disposal of batteries? Hybrid is not the only alternative technology.”

Ford Australia already offers LPG-compatible powertrains and has diesel engines in its European cars and also is expanding its range of small-capacity, high-output gasoline engines, he says, noting soaring gasoline prices have seen a reversal of fortunes for the LPG Falcon.

Not long ago, a used LPG Falcon was worth A$1,000 ($939) less than a similar gasoline model, but in the last two years, that has changed, Winslow says. “A BF Falcon will now, on average, bring A$2,500 ($2,348) or A$2,600 ($2,442) more if it has Egas.”

Chrysler Australia Pty. Ltd. has begun offering LPG engine-conversion kits on its 300C and Jeep Grand Cherokee models. The kits, for 6- and 8-cyl. gasoline models, are available through dealers.

The engines are fitted with a Vapor Sequential Injection (VSI) system developed by Parnell LP Gas Systems in Victoria, in cooperation with Chrysler, and include components from the Netherlands’ kit-maker Prins Autogassystem B.V.

Robert Moorecroft, Chrysler Australia general manager-service and parts, says Chrysler already offers diesel-powered variants and now has an (LPG) alternative that has “fantastic” fuel economy and the benefits of a gasoline engine.

He says VSI is the latest generation of LPG-induction technology and overcomes the problems that sometimes plagued old-style venturi systems, such as backfiring and underperformance.

Parnell is developing LPG kits for other Chrysler, Jeep and Dodge models that are expected to be available through dealers in the near future.

Jack Haley, NRMA Motoring Services research manager, says in a published report Australian auto makers will struggle to meet a 20% increased fuel-economy target by 2010 without conducting major overhauls of existing models.

But that can be accomplished without turning to hybrids.

Viable options include moving from single- to twin-cam engines and multi-speed transmissions, he says. Reducing the weight of vehicles through greater use of aluminum and composite plastics also would boost fuel efficiency.

“If you really get serious, you can achieve quite significant savings by taking weight out of the vehicle,” Haley says, but it is unlikely auto makers can make such changes by 2010.

“It takes essentially two or three years to get a car on the market starting from scratch. It would take rapid manufacturing changes to develop that ability,” he says.

Australia’s Industry Minister Kim Carr compares changing the direction of the auto industry to trying to turn around an aircraft carrier. “These are very significant changes being proposed in what is an incredibly short time period,” he says.

Against this backdrop, Honda Australia Pty. Ltd. wants state and federal governments to establish incentives for consumers to purchase hybrid vehicles and in the process become true “green partners” in the commitment to a cleaner, greener Australia.

Honda has been at the forefront of developing technologies to reduce emissions at a global level for many years,” Honda Australia Senior Director Lindsay Smalley says. “We wanted Australia to benefit from this technology, so we introduced hybrid motoring with the 2-seater Insight Hybrid Coupe in 2000.”

Honda, perhaps feeling sidelined by the publicity over Toyota Australia’s plan to build the Camry Hybrid, wants government initiatives that will assist Australians who want to reduce their carbon footprint and fuel usage.

“As with any new technology, it will take time for hybrids to be widely accepted,” Smalley says. “Honda believes abolishing federal import tariffs and cutting stamp duty and registration on hybrid vehicles would greatly assist their presence on our roads and give consumers a wider choice of hybrid motoring options.”

Since it was introduced in Australia in 2004, Smalley says some 2,363 Civic Hybrids have been sold, mostly to private buyers.

Every Civic Hybrid sold receives a Climate Care warranty, a partnership between Honda Australia and the Greenfleet Australia environmental group. During the first three years of the vehicle’s life, 18 trees are planted, effectively making the car carbon neutral, Honda says.

Meantime, Sydney’s University of Technology is touting its offering for Australia’s green-car revolution: A Toyota Prius converted into a plug-in hybrid that can be charged directly from the domestic power grid.

Funded by Melbourne-based Szencorp Pty. Ltd., the Prius PHEV is fitted with extra batteries for greater storage and a power socket so it can be charged directly from the grid.

Szencorp says what sets PHEVs apart from other electric cars is they have “power out” capacity, meaning they can supply electricity to homes and offices in high-demand periods.

Project Director Chris Dunstan says plug-ins represent the next major technological change.

“Plug-in hybrid cars have the potential to revolutionize not only how we drive but also how we generate and use electricity in our homes and workplace,” he says.

“If charged up on renewable energy, the PHEV can dramatically reduce greenhouse-gas emissions, as it can run on electricity for more than 30 km (19 miles), the average daily commute of many Australian motorists. For longer trips, it simply switches back to normal hybrid operation.”