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VIDEOHybrids: It's Not Easy Being Green
By
Scott Reeves Mar 17, 2009 1:00 pm
Sales of fuel-efficient vehicles plummet as economy, price of oil head south.
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Fewer buyers are willing to pay a premium of several thousand dollars for a gas-electric hybrid car because it would take decades to recoup the added cost with gasoline selling at $2 or less a gallon in many regions of the country. Instead, many buyers order gas-only subcompacts.
But the drop in sales doesn’t mean production of hybrids will cease. Thanks to the recent round of government bailouts of Detroit automakers and higher gas mileage standards, car companies will continue to produce the gas-electric cars. If nothing else, the high-mileage cars increase the fleet average, a key marker in meeting increasingly tough federal standards.
Honda (HMC) also will offer new hybrids this month to an increasingly indifferent market. The automaker offers incentives totaling about $2000 on its formerly in-demand Civic hybrid. So far, most prospective buyers have yawned.
Toyota (TM), the sector leader with Prius, is having trouble selling hybrids in large numbers. Toyota has delayed plans to build the Prius in a new $1.3 billion plant in Mississippi, citing low demand for the hybrid vehicle.
AutoNation (AN), the nation’s largest chain of new car dealers, says it now has a 148-day supply of the hybrid version of the Honda Civic. Last June, it had a 2-day supply. Meanwhile, the company has a 14-day supply of the gasoline-only Civics, the Los Angeles Times reports.
Slack demand hasn’t halted the development of new hybrid models. Honda’s Insight, often called the “Prius-fighter” because it looks and performs much like the Toyota model, is scheduled to arrive at dealers soon. Next year, Honda plans to offer a sporty hybrid coupe. Toyota plans to roll out updated Prius and Lexus hybrids this spring. By 2011, Toyota plans to market a subcompact hybrid with a sticker price below $20,000.
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