Hybrid sales mostly slack despite gas spike
#1
Hybrid sales mostly slack despite gas spike
Hybrid sales mostly slack despite gas spike
Using less fuel, tax credits not enough for many consumers, analysts say
http://www.msnbc.msn.com/id/12467379/
Using less fuel, tax credits not enough for many consumers, analysts say
DETROIT - U.S. gas prices have risen nearly a third over the past year without touching off a boom in sales of fuel-efficient hybrid vehicles, some of which are sitting on dealer lots for as long as three months.
Many U.S. consumers are concluding that what they save in gasoline and on tax credits from driving a hybrid does not justify the roughly $3,000 premium they face at the dealership, even with high and volatile fuel prices, analysts said.
That poses a problem for car makers including Honda Motor Co. Ltd., Ford Motor Co. and Toyota Motor Corp., that have bet on broadening popularity for hybrids, including more powerful six-cylinder models and sport utility vehicles.
"What it comes down to is whether you want to pay for that premium right up front... or pay for it incrementally in the form of a different vehicle that gets a slightly lower fuel economy," CSM Worldwide analyst Mike Jackson said.
Gasoline prices across the United States are nearing $3 a gallon, up from $2.23 a year ago, driven by a surge in oil prices to record highs.
Hybrid vehicles, which use both gasoline and electric power to achieve better mileage, have been touted as a way to reduce consumption of oil and to reduce exhaust emissions.
Some hybrids qualify for special car pool lanes in some states, a key benefit in traffic-clogged areas. Many also carry federal and state tax incentives.
But for most U.S. consumers, the economics still favor traditional gasoline-powered cars.
An April report by Consumer Reports concluded only two hybrids in the U.S. market offer savings over five years and 75,000 miles — the Honda Civic and the Toyota Prius. Even then, the savings are small: $400 and $300 respectively.
Other models actually cost between $1,900 and $5,500 more to own and operate, the magazine published by Consumers Union reported. It assumed gasoline prices of $3 per gallon, rising to $4 per gallon over the five years.
‘Do the math’
"For there to be a major shift in the industry, prices have to go well above $3 a gallon and remain there consistently," said Tom Libby, senior director of industry analysis at Power Information Network. "If you do the math it's still going to take many, many years to recoup your extra price through gas savings."
Honda has said it may cut production of its Accord hybrid after weaker-than-expected sales in its first four months on the market.
The Accord hybrid sat 90 days on average on dealer lots last month, while Ford's Escape hybrid took 61 days to sell on average. Toyota Highlander and Lexus RX400h hybrids sat on the lot for over a month, according to Power Information Network.
The two hot-selling hybrids have been the Prius, selling on average in 8 days, and the Civic hybrid, selling in 12 days, on average.
Jackson and other analysts said the Prius has been a hit because its distinctive styling immediately identifies it as a hybrid — conferring a kind of halo effect for its drivers.
The lack of broader sales momentum has prompted some automakers to offer discounts on hybrids.
Ford is offering interest-free loans, and has underwritten a national ad campaign, featuring Kermit the Frog singing: "It is easy being green."
Ford and other automakers have a lot of investment riding on the hybrid market. Ford is planning to increase production of the gasoline-electric vehicles tenfold to 250,000 by 2010.
Toyota is targeting sales of 400,000 hybrids this year. General Motors Corp., Nissan Motor Co.> and others all plan to introduce hybrid models in coming years.
Hybrids currently account for only about 1 percent of all U.S. light vehicle sales, a share expected to grow to only 4 percent in the next six years, according to J.D. Power.
The automakers are watching the hybrid market very closely and trying to project its longer-term growth said David Cole, chairman of research firm Center for Automotive Research.
"A fairly realistic market is beginning to emerge here," Cole said, referring to the slower sales of some hybrid models. "Some of the luster is wearing off."
Many U.S. consumers are concluding that what they save in gasoline and on tax credits from driving a hybrid does not justify the roughly $3,000 premium they face at the dealership, even with high and volatile fuel prices, analysts said.
That poses a problem for car makers including Honda Motor Co. Ltd., Ford Motor Co. and Toyota Motor Corp., that have bet on broadening popularity for hybrids, including more powerful six-cylinder models and sport utility vehicles.
"What it comes down to is whether you want to pay for that premium right up front... or pay for it incrementally in the form of a different vehicle that gets a slightly lower fuel economy," CSM Worldwide analyst Mike Jackson said.
Gasoline prices across the United States are nearing $3 a gallon, up from $2.23 a year ago, driven by a surge in oil prices to record highs.
Hybrid vehicles, which use both gasoline and electric power to achieve better mileage, have been touted as a way to reduce consumption of oil and to reduce exhaust emissions.
Some hybrids qualify for special car pool lanes in some states, a key benefit in traffic-clogged areas. Many also carry federal and state tax incentives.
But for most U.S. consumers, the economics still favor traditional gasoline-powered cars.
An April report by Consumer Reports concluded only two hybrids in the U.S. market offer savings over five years and 75,000 miles — the Honda Civic and the Toyota Prius. Even then, the savings are small: $400 and $300 respectively.
Other models actually cost between $1,900 and $5,500 more to own and operate, the magazine published by Consumers Union reported. It assumed gasoline prices of $3 per gallon, rising to $4 per gallon over the five years.
‘Do the math’
"For there to be a major shift in the industry, prices have to go well above $3 a gallon and remain there consistently," said Tom Libby, senior director of industry analysis at Power Information Network. "If you do the math it's still going to take many, many years to recoup your extra price through gas savings."
Honda has said it may cut production of its Accord hybrid after weaker-than-expected sales in its first four months on the market.
The Accord hybrid sat 90 days on average on dealer lots last month, while Ford's Escape hybrid took 61 days to sell on average. Toyota Highlander and Lexus RX400h hybrids sat on the lot for over a month, according to Power Information Network.
The two hot-selling hybrids have been the Prius, selling on average in 8 days, and the Civic hybrid, selling in 12 days, on average.
Jackson and other analysts said the Prius has been a hit because its distinctive styling immediately identifies it as a hybrid — conferring a kind of halo effect for its drivers.
The lack of broader sales momentum has prompted some automakers to offer discounts on hybrids.
Ford is offering interest-free loans, and has underwritten a national ad campaign, featuring Kermit the Frog singing: "It is easy being green."
Ford and other automakers have a lot of investment riding on the hybrid market. Ford is planning to increase production of the gasoline-electric vehicles tenfold to 250,000 by 2010.
Toyota is targeting sales of 400,000 hybrids this year. General Motors Corp., Nissan Motor Co.> and others all plan to introduce hybrid models in coming years.
Hybrids currently account for only about 1 percent of all U.S. light vehicle sales, a share expected to grow to only 4 percent in the next six years, according to J.D. Power.
The automakers are watching the hybrid market very closely and trying to project its longer-term growth said David Cole, chairman of research firm Center for Automotive Research.
"A fairly realistic market is beginning to emerge here," Cole said, referring to the slower sales of some hybrid models. "Some of the luster is wearing off."
http://www.msnbc.msn.com/id/12467379/
#2
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No one claimed hybrids are the cure for high gas prices. They are part of the solution. It pisses me off that so many writers want to state there is basically no use in buying one.
The RX has no trouble with sales, the hybrid model alone outsold or was only a couple hundred untis shy of ENTIRE competitor lineups. Did they do any research?
The Prius and Civic are selling well.
Not sure of the Highlander, and the Escape is the least advanced of all the hybrids.
I guess they would rather continue with HEMI engines in all cars.
The RX has no trouble with sales, the hybrid model alone outsold or was only a couple hundred untis shy of ENTIRE competitor lineups. Did they do any research?
The Prius and Civic are selling well.
Not sure of the Highlander, and the Escape is the least advanced of all the hybrids.
I guess they would rather continue with HEMI engines in all cars.
#4
It's seriously stupid how some writers seem like they really want hybrids to not succeed. He's
basically writing what has been written a hundred times by other.
What he fails to mention is that hybrids which are aimed more at fuel efficiency rather than
increased performance are doing better in the marketplace. The Prius and Civic are selling
quite well and given more options, these types of hybrids are the direction most consumers want
to head. The Accord has not really hit the target Honda wanted because it has to compete with
it's own Civic. Toyota doesn't have any other car to cannabolize Prius sales.
The technology is fairly new and I'm sure as gas prices head towards $4/gallon and the
price of hybrids start going down, the cost benefit would improve. Sure it takes years to
recoupe the money for owning a hybrid, but the writer forgets the environmental impact
these cars are trying to make: LOWER EMMISSIONS.
basically writing what has been written a hundred times by other.
What he fails to mention is that hybrids which are aimed more at fuel efficiency rather than
increased performance are doing better in the marketplace. The Prius and Civic are selling
quite well and given more options, these types of hybrids are the direction most consumers want
to head. The Accord has not really hit the target Honda wanted because it has to compete with
it's own Civic. Toyota doesn't have any other car to cannabolize Prius sales.
The technology is fairly new and I'm sure as gas prices head towards $4/gallon and the
price of hybrids start going down, the cost benefit would improve. Sure it takes years to
recoupe the money for owning a hybrid, but the writer forgets the environmental impact
these cars are trying to make: LOWER EMMISSIONS.
#5
The RX400h is doing well because the customer is less price sensitive, gets a better performing vehicle than the RX330, and 'feels good' being eco-friendly.
The Prius is the answer to the hard core "look at me, I'm doing my part" crowd.
The Accord, Escape, Highlander are either too expensive for their target customers or don't offer enough benefit, or they're not DISTINCTIVE ENOUGH to have any 'image'.
I think car makers need to make more UNIQUE hybrid vehicles, not just stick them in an existing chassis.
Hey how about a Porsche hybrid, and stick the electric engine in the FRONT since it's already empty there. LOL
The Prius is the answer to the hard core "look at me, I'm doing my part" crowd.
The Accord, Escape, Highlander are either too expensive for their target customers or don't offer enough benefit, or they're not DISTINCTIVE ENOUGH to have any 'image'.
I think car makers need to make more UNIQUE hybrid vehicles, not just stick them in an existing chassis.
Hey how about a Porsche hybrid, and stick the electric engine in the FRONT since it's already empty there. LOL
#6
They are saying slack because they are not seeing rise in sales, which is not possible to the manufactoring reasons. When Camry Hybrid goes out for full month of sales, I bet we will see new articles from same writers writing how "hybrids are in demand". :-).
Also, it is twisting facts - RX400h was put on the list as TOP 10 wanted cars in the USA due to 32 day supply, which is a lot less than average 60 day supply. This article makes it seem as one month supply is too much, lol.
Also, it is twisting facts - RX400h was put on the list as TOP 10 wanted cars in the USA due to 32 day supply, which is a lot less than average 60 day supply. This article makes it seem as one month supply is too much, lol.
#7
There are a few hybrid-related questions that I haven't heard definite answers on:
1) The cost of replacing the batteries
2) How the batteries will be disposed of
These aren't major issues at the moment... but eventually, these batteries are going to crap out.
I guess we can just bury the dead batteries?
Have the "Greenies" given this any consideration?
1) The cost of replacing the batteries
2) How the batteries will be disposed of
These aren't major issues at the moment... but eventually, these batteries are going to crap out.
I guess we can just bury the dead batteries?
Have the "Greenies" given this any consideration?
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#8
The automakers need to produce a miracle and figure out how to produce a worth while hybrid
that barely costs more than conventional cars. Let's say no more than $1,000 more. Then they will sell. Or, have them get extremely good gas mileage like 100 + mpg which Toyota says the next Prius should do. Then they WILL sell. There simply needs to be greater incentives.
that barely costs more than conventional cars. Let's say no more than $1,000 more. Then they will sell. Or, have them get extremely good gas mileage like 100 + mpg which Toyota says the next Prius should do. Then they WILL sell. There simply needs to be greater incentives.
#9
Originally Posted by SoCalSC4
There are a few hybrid-related questions that I haven't heard definite answers on:
1) The cost of replacing the batteries
2) How the batteries will be disposed of
These aren't major issues at the moment... but eventually, these batteries are going to crap out.
I guess we can just bury the dead batteries?
Have the "Greenies" given this any consideration?
1) The cost of replacing the batteries
2) How the batteries will be disposed of
These aren't major issues at the moment... but eventually, these batteries are going to crap out.
I guess we can just bury the dead batteries?
Have the "Greenies" given this any consideration?
I was just thinking about this a couple of days ago. I said to myself, "with Toyota products lasting so long, are the batteries going to hold up (in the Prius) to the longevity of the gas engine and body, ect. Very good question. If people find out the battery only lasts half as long as the rest of the car will last, then hybrid sales are going to really suck.
#10
Originally Posted by SoCalSC4
There are a few hybrid-related questions that I haven't heard definite answers on:
1) The cost of replacing the batteries
2) How the batteries will be disposed of
These aren't major issues at the moment... but eventually, these batteries are going to crap out.
I guess we can just bury the dead batteries?
Have the "Greenies" given this any consideration?
1) The cost of replacing the batteries
2) How the batteries will be disposed of
These aren't major issues at the moment... but eventually, these batteries are going to crap out.
I guess we can just bury the dead batteries?
Have the "Greenies" given this any consideration?
I'm sure the next generation Prius will get 100 miles per gallon and that would be a serious incentive to purchase a hybrid...
Last edited by Trexus; 04-25-06 at 10:12 AM.
#11
Originally Posted by Trexus
Good point. Once all these batteries have reached their useful life what will become of those used old batteries? I'm sure there will be a recycling program where one can drop off their old battery and can be taken apart to be recycle all over again.
The bigger question for consumers is: How much are replacement batteries going to cost?
Another $3,000? $4,000? So much for saving at the pump.
#12
Originally Posted by JLSC4
The bigger question for consumers is: How much are replacement batteries going to cost?
Another $3,000? $4,000? So much for saving at the pump.
Another $3,000? $4,000? So much for saving at the pump.
Hybrid cars hold value well now, but because of the comlexity of the cars and the potential high cost of the battery replacement in its later life, I am wondering if the depreciation is going to hit bottom.
#14
Some people are also waiting for the new diesels and the low-sulfur diesel fuel on the way and promised us here by the end of the year ( We have discussed this numerous times on CL ). These new diesels and diesel fuel promise both good mileage and low emissions with much less complexity than hybrids.
#15
Originally Posted by LexusChris
Hybrid sales slack? I see a Lexus RX 400h everyday, a Prius everyday and the new Civic hybrid on the streets of Queens.