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US Hybrid Sales in May Up 2.3x from 2004; Sales Pace Drops from April 05

Sales of hybrids in the US increased 2.3 times in May 2005 to 16,887 units from 7,275 units the prior year. However, results for all automakers were down from the torrid pace set in April.

Sales of the market-leading Prius dropped back below 10,000 to post the car’s third strongest month to date. Combined with the 2,931 units of the Lexus Rx400h—the strongest of its two months of sales—Toyota captured 73% of all hybrid sales for the month.

Hybrid_sales_may05_2 Hybrid_sales_may05_1

Honda saw a sharp drop in sales of the Civic hybrid—down 40% to 1,895 from May 2004. Sales of the Honda Accord hybrid likewise sputtered a bit, dropping back to 1,314, but still representing its third strongest month. Sales of the Insight dropped back to 52 units, a decrease of 60% from May 2004.

Ford’s Escape hybrid also dropped back off of its pace from the prior two months, posting 1,234 units—it’s third strongest month as well. (The Escape model (conventional and hybrid) as a whole did not do as well—sales dropped 40% in May from the prior year, from 23,197 units to 14,038.)

It will be interesting to see if the reports of the stalling problems Toyota has had with some Prius units, and now the NHTA investigation into those problems (earlier post), affect sales at all. Probably not, unless the scale and severity of the problem escalates.

Car Buyer’s Notebook has an interesting piece on the models leading the industry with the lowest “turn time”—the number of days a car sits on the lot before it is sold.

Toyota dominated the list with six of the ten—two from Lexus, three from Toyota and one Scion model. Toyota was the only manufacturer with more than one vehicle on the list, and the Prius hybrid has the distinction of being number one on the list every month this year.

Coincidentally, the LA Times ran a piece on the high reliability of the Prius.

It’s clearly a good time to be Toyota, and the company is working hard to maximize its strategic gains during this period (before Fortune’s wheel turns again).

Toyota clearly seeks to establish itself as a domestic North American automaker. The company has plans to build three additional auto plants through 2010—the Texas plant coming online in Fall 2006; a new Canadian plant expected to go live in 2008, and a potential eighth plant by 2010. (Nikkei)

We will continue efforts so that we’re recognized as a U.S. firm.

—Toyota President Fujio Cho

Manufacturing the upcoming Camry hybrid in the US is part of that strategy; it will be illustrative to see when (if) Prius assembly moves to North America as well. Toyota’s hybrids represent 6% of the vehicles it sold in May, yet they carry a disproportionate impact on the company’s positioning and the market’s perception of it.



Lots of questions, hard to answer...

* Has the Prius' stalling problems negatively impacted Prius sales? Sales of other hybrids?
* Has the recent "gas price relief" made a significant impact on the demand, thereby reducing sales?
* If so, is there a "price point" (say, $2.23 a gallon) where sales are much stronger above that price of gas than below it?
* What does the demand curve look like, with demand on the y axis and price of gas on the x axis?
* If the sales of the Prius dropped by a few thousand units this month, does that mean that the wait lists have shortened significantly? Have they been eliminated for the most part?
* At what point will Honda drop the Insight? Sure, they are the market leader in mpg, but they're selling 52 cars a month. It seems like a lot of overhead for low sales.
* What would a chart look like when it was normalized to all car sales? In other words, what percent of cars sold each month were Prius? Insight? Civic hybrid? After all, if the hybrids took a big dip -- but so did sales of other cars -- then the issue is the consumer market for autos, not the hybrids themselves.

Any answers???


Some. Sort of. :-)

In response to the gas price question, I plotted the data since January 2004. You’ll have to look here, since I can’t post a graphic in a comment.

It seems that Honda will keep the Insight going longer, even at these low sales levels. (At least, that’s what they said a few months ago. The Insight just picked up another award for its engine—the 10th such.)

Don’t know the situation on Prius wait lines, or how the addition of other hybrid models will affect this.

In terms of all car sales, hybrid sales are very small. Just rounding, figure about 1.5 million light duty vehicles sold in May compared to 17,000 hybrids. That’s about 1.1%. But that’s a very powerful 1.1%. :-)



Thanks for the responses. As to the last point -- I knew hybrid sales would be about 1.1%. My point though was this: if the percent sales are increasing, in a sense it doesn't matter if the actual number of hybrid vehicles sold goes down... as hybrids make up a larger and larger part of the portfolio of Toyota sales -- and of sales in general -- the clear indication is that (a) hybrids really are growing in popularity, and (b) that car companies will respond to this clearly growing market segment.

Just another way to look at the data, that's all...

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