Record gasoline prices drove hybrid-electric cars and trucks to a new level of popularity in May, but the majority of those sales went to just one automaker.
As U.S. hybrid sales jumped to 45,000 vehicles — their highest monthly total ever — Toyota Motor Co. captured 80% of all new hybrid customers, according to a Free Press analysis. While other automakers reported sizable increases in hybrid sales, Toyota saw sales of its hybrid Prius more than double from a year earlier.
With sales of 24,009 vehicles — more than all other hybrids combined — the Prius was the ninth top-selling U.S. model in the industry for May, outselling mass-market names such as the Nissan Altima, Ford Mustang and Chevrolet Cobalt. The only car model from a Detroit automaker that outsold the Prius last month was the Chevrolet Impala.
Industry experts say the Prius' dominance of the hybrid market shows that other automakers may need some new marketing tricks to win broad acceptance among consumers still wary about its higher costs.
“It has become sort of an icon for hybrids, and for environmentally friendly vehicles,” said Tom Libby, senior director of industry analysis with J.D. Power and Associates. “If you have a Prius, it's clear to everyone you're driving a hybrid.”
Other automakers already appear to be adapting the lessons of the Prius. Honda Motor Co. said Monday that it would halt sales of its slow-selling Honda Accord hybrid this fall when a redesigned Accord goes on sale. The automaker has said its next hybrid vehicle will be a Prius-like model that doesn't compete directly with any other vehicle in its lineup.
Previous jumps in gas prices have triggered a rush by buyers toward smaller or more fuel-efficient vehicles, and the current surge has been no different.
Toyota has made several moves over the past few months to boost Prius sales, raising production at its factory in Japan by 50% which allowed Toyota to set a U.S. sales target of 150,000 Priuses this year, up from 106,971 last year. Toyota spokesman Bill Kwong said the increased production had helped ease demand that had left Priuses rare in some markets, allowing dealers to have a few models to offer customers rather than just one or two.
The automaker had offered some incentives on the Prius earlier this year to offset declining federal tax incentives, which will stop for Priuses sold after September, and thrown in options at no cost.
But with gas prices topping $3, being known as the flagship of fuel economy creates its own demand. Toyota ended May with a nine days' supply of Priuses on hand — most Toyotas average about 30 days' supply — and Morgan Stanley analysts calculated that at the May rate of sales, Toyota could move 244,000 Priuses a year.
The booming sales of the Prius may also be due to the lack of a head-to-head comparison with other Toyota vehicles. A buyer considering other hybrids, such as the Toyota Camry sedan and Ford Escape SUV, can usually stroll across a dealer's showroom and see a non-hybrid model of the same vehicle for $3,000 to $5,000 less before any incentives, a gap that isn't always overcome by the hybrid's fuel savings.
“You can't help but see how much less you'd be paying for what looks like the identical vehicle, and it invites comparison,” Libby said. “Long term, the premiums should decline, and it should be less of an issue.”
Even excluding the Prius, Toyota's other hybrid models combined to outsell the rest of the industry, with its Camry hybrid racking up 6,853 sales and its Highlander Hybrid SUV selling 3,312.
Some analysts said Toyota's hybrid models may reinforce the company's image even if their sales are relatively limited. Art Spinella, an industry analyst with CNW Marketing/Research, said a recent survey of 5,400 car shoppers showed buyers placing Toyota second only to Honda Motor Co. for leading the industry with environmental technologies, a position Toyota would not have held five years ago.
“Being green is reaching critical mass proportions,” Spinella said.
Hybrid sales also increased at other automakers. Honda sold 4,520 Civic hybrids, a 50% increase from a year earlier. Ford's sales of the hybrid Ford Escape and Mercury Mariner SUV hit a monthly record of 3,214 in May. General Motors Corp., which offers a hybrid Saturn Vue SUV and Saturn Aura sedan, does not release separate hybrid sales figures.
George Pipas, Ford's director of industry sales analysis, said the automaker plans to sell about 20,000 hybrids this year, same as the previous year, but faced a challenge in getting buyers to give its more efficient models a chance.
“Consumers think about us in truck and SUV terms,” said Pipas. Toyota's “reputation for fuel efficiency is a big plus for them, where we have to communicate it and raise awareness.”
