Demand For Hybrid Cars Down
Car companies are finding it hard to sell hybrid models in the midst of the recession.
The economic crisis has caused many Americans to cut back on spending and that has amounted to a decreased demand for new vehicles, especially hybrids.
In April, hybrid sales reached their highest mark. Gas prices reached an average of $3.57 a gallon during the same month.
Last summer, increased gas prices drove demand for hybrids, but now that fuel prices have fallen dramatically, consumers are overlooking hybrids.
Last month, only 15,144 hybrids were sold in the US, down almost two thirds from April 2008.
"When gas prices came down, the priority of buying a hybrid fell off quite quickly," Wes Brown, a partner at Los Angeles-based market research firm Iceology, told the LA Times. "Yet even as consumer interest declined, the manufacturers have continued to pump them out."
In July, Prius models on US Toyota dealership lots were hard to find because demand was so high.
At that time, Toyota dealers didn’t have enough Prius models in stock to last two days. Now dealers have more than 80 days’ worth on hand, prompting many to offer alluring incentives for consumers.
According to a report from Bloomberg, Toyota Motor Corp, may cut the price of its Prius in an effort to meet that of Honda Motor Co.’s Insight.
The report is based on a Nikkei newspaper report today that said the starting price of the Prius will be cut to 1.89 million yen ($19,250) from 2.33 million yen.
Honda has set a goal of selling 5,000 Insights a month domestically and has said it hopes to sell 100,000 in North America in the model’s first 12 months. The new Insights will arrive on dealer lots in the next few months.
“The automakers are in the situation of needing to pacify politicians that are in the position to bail them out with expensive fuel-efficient cars," Rebecca Lindland, auto analyst with IHS Global Insight, told the LA Times. "But shouldn’t it be more about satisfying the needs of the American consumer?"
A recent Auto Trader poll found that 42 percent of drivers said the next vehicle they purchase will be a lower emissions car than their current one. Additionally, 51 percent said they would consider buying a car with lower CO2 emissions.
"It’s a tough time to bring out almost any product right now," said George Pipas, chief sales analyst of Ford Motor Co. "But getting hybrids out right now is as much about image as anything else."
—
On the Net: