The lowdown on hybrids
After seven years on the U.S. auto market, hybrid gas-electric vehicles have gone from being merely an environmentalist's political statement to a legitimate option for mainstream car buyers.
And analysts think the hyperefficient cars have only
just begun their push onto America's highways.
"They really are leaving the niche market and coming into the mainstream," says Kevin Riddell, automotive analyst for J.D. Power and Associates.
||The facts on hybrids
According to Power's Automotive
Forecasting Services Hybrid-Electric Vehicle
Outlook, annual hybrid vehicle sales are expected
to more than triple by 2012 to 780,000 expected
sales. Supporting that prediction, hybrids
enjoyed a psychological victory in June when
Toyota sold a record 27,000 Prius hybrids
in the month, a 76 percent increase over June
of last year, and more than in any previous
month to date.
But, before you start to think
hybrids are taking over the road, it might
help to get some perspective. Automakers sold
more than 1.6 million vehicles in June, meaning
the Prius commanded only about 1.5 percent
of auto sales that month. And even if the
J.D. Power and Associates prediction came
true today, that would mean the total hybrid
market still would only account for about
5 percent of total auto sales.
"So, I guess it depends on your definition of what mainstream is," says Philip Reed, consumer advice editor for automotive resource Edmunds.com. "If you just look at the sales numbers, you might say this isn't mainstream. But what is significant is that everyone is now aware of hybrids, and everyone talks about them, even if they aren't actually buying them. Hybrids' biggest contribution is that they have raised the discussion of fuel economy on a national level."
So, what makes analysts think demand for the efficient vehicles is about to spike?
Well, for one, supply appears to have finally caught up with demand for the top-selling hybrid model, the Prius.
"Early on, buyers were paying the sticker price, and then a premium on top of that because Toyota just couldn't keep up with demand," Reed says. But with Toyota ramping up production, that is no longer the case, he says. Now, when buyers head to a car lot wanting to buy a Prius, they can leave with a car instead of a spot on a waiting list.
Another factor in play that will push more sales, Riddell says, is that there are more hybrid options than ever on the showroom floor. When they debuted in the United States in 1999 and 2000, the only hybrid options were the Honda Insight and the Toyota Prius. And until very recently, buying a hybrid meant buying a small sedan, a choice most U.S. car buyers don't typically make.
That's not the case today. Car
buyers in the 2008 model year can choose between
a host of hybrid sedans, sport utility vehicles
and even pickups.
"And with more hybrids and more competition, that certainly will help drive up sales," Riddell says.
And with no end in sight for high gas prices, nobody is predicting a slowdown in demand for fuel efficient cars.