Ford hybrid to be sold at lower price

July 22, 2010 at 12:00a.m.

Associated Press

DEARBORN, Mich.

For the first time, an American automaker plans to sell a hybrid car for the same, lower price as its gas-powered counterpart, removing at least one obstacle for drivers who want a greener ride.

At a little more than $35,000, the 2011 Lincoln MKZ sedan won’t be cheap, but the decision by Ford to match the prices of the two styles could lead competitors to follow suit with future models.

The hybrid MKZ, debuting this fall and running on both gas and electric power, will be a bargain after factoring in savings at the pump. It gets more than double the mileage of the traditional version in city driving.

Though automakers won’t reveal what they spend to install a hybrid system in a car, the final product usually costs several thousand dollars more than a gas-powered version of the same car.

The Lexus HS 250h, the MKZ’s closest competitor, costs about $2,500 more than the Lexus IS, a similar, small, gas-powered sedan. Ford charges $8,840 more for the hybrid version of its Ford Escape SUV.

The MKZ can still make money even if Lincoln doesn’t charge more for the hybrid, said Erich Merkle, president of the consulting company Autoconomy.com. Luxury cars are sold at a significant premium, he said, ensuring a profit for Ford.

Lincoln also can borrow the hybrid system from the Ford Fusion, its corporate twin, and save on development costs.

“Conventional wisdom is that the hybrid should be priced higher, but there’s not really anything to say that a hybrid has to command a higher price,” Merkle said.

Besides, Ford had to keep the price down, said Jessica Caldwell, an analyst for Edmunds.com. If it had sold for more than $40,000, it would have faced tougher competition from luxury cars such as the Mercedes E-Class or the Audi A6, she said.