Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Speed

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Thread: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Speed

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    Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Speed

    Very good article with some good graphics as well.

    Long and detailed in a good way.

    Only misses a couple of things and has only one small bow to Toyota with the usual kick to GM .



    From the Los Angeles Times

    AUTOS

    Hybrid car sales go from 60 to 0 at breakneck speed

    The gas-electric vehicles are piling up on dealers' lots as anxiety over gasoline prices evaporates. But more hybrid models are on the way.

    By Ken Bensinger

    March 17, 2009

    The Ford and Honda hybrids due out this month are among dozens planned for the coming years as automakers try to meet new fuel-efficiency standards and please politicians overseeing the industry's multibillion-dollar bailout.

    Unfortunately for the automakers, hybrids are a tough sell these days.

    Americans have cut back on buying vehicles of all types as the economy continues its slide.

    But the slowdown has been particularly brutal for hybrids, which use electricity and gasoline as power sources.

    They were the industry's darling just last summer, but sales have collapsed as consumers refuse to pay a premium for a fuel-efficient vehicle now that the average price of a gallon of gasoline nationally has slipped below $2.

    "When gas prices came down, the priority of buying a hybrid fell off quite quickly," said Wes Brown, a partner at Los Angeles-based market research firm Iceology.

    "Yet even as consumer interest declined, the manufacturers have continued to pump them out."

    Last month, only 15,144 hybrids sold nationwide, down almost two-thirds from April, when the segment's sales peaked and gas averaged $3.57 a gallon.

    That's far larger than the drop in industry sales for the period and scarcely a better showing than January, when hybrid sales were at their lowest since early 2005.

    In July, U.S. Toyota dealers didn't have enough Prius models in stock to last two days, and many were charging thousands of dollars above sticker price for the few they had.

    Today there are about 80 days' worth on hand, and dealers are working much harder -- even with the help of $500 factory rebates -- to move the egg-shaped gas-savers off lots from Santa Monica to Miami.

    This month, Honda is offering $2,000 in cash, financing and leasing incentives to buyers of the formerly sold-out Civic hybrid, while a dealer in northern Michigan is dangling $6,000 cash back to those willing to buy a hulking Chevy Tahoe hybrid.


    ***********

    Yet automakers believe they have little choice but to make more hybrids.

    Though car buyers are losing interest, politicians are pushing them as key to reducing U.S. dependence on foreign oil and limiting the global-warming gases that cars emit into the atmosphere.

    In January, President Obama called on the industry to "thrive by building the cars of tomorrow" and prepare for federal and state regulations that could push average fuel economy above 40 miles per gallon by 2020.

    "The automakers are in the situation of needing to pacify politicians that are in the position to bail them out with expensive fuel-efficient cars," said Rebecca Lindland, auto analyst with IHS Global Insight.

    "But shouldn't it be more about satisfying the needs of the American consumer?"

    Dubbed the Prius-fighter because of its similar looks and performance, the new Honda Insight hybrid is set to arrive on dealer lots in the next few weeks.

    Next year, the Japanese automaker will make a sporty hybrid coupe.

    Hyundai and Audi will deliver their first hybrids in 2010, and Toyota has a redesigned Prius and a new Lexus hybrid coming this spring.

    Toyota said Friday that it would make a subcompact hybrid priced below $20,000 in 2011.


    ****************

    The biggest push is coming from Detroit.


    Ford plans to follow its new 41-mile-per-gallon Fusion and Mercury Milan hybrids with a battery-powered van in 2010 and a "family" of hybrids by 2012.

    And last month, in their request to the Obama administration for $21.6 billion in additional bailout cash, both General Motors and Chrysler announced a hybrid onslaught.

    Chrysler promised eight new hybrids or electric vehicles by 2015, and GM, which already sells eight hybrids, said 26 of the 33 cars it sells in 2015 won't run on gas alone, including the Chevrolet Volt, a plug-in hybrid due out next year.

    **********

    The hybrid flood marks a lasting commitment to a powertrain technology that currently represents only about 2% of U.S. vehicle sales and, by most accounts, is deeply unprofitable.


    Toyota said last year that it was finally making money on the Prius after nearly a decade producing it, but executives at other automakers acknowledge that they lose money on every hybrid sold.

    < Only after the effects of the humongous Yen Subsidy at that time were added in - they're very probably losing again now with the current exchange rates. >

    "If we were making money on the Civic hybrid, we weren't making a lot," Honda spokesman Chris Martin said.

    That may help explain why fewer than 2 of every 100 Chevy Malibus sold last month had the hybrid powertrain and why Ford priced its new hybrid Fusion, which dealers expect to start receiving this month, $8,000 above the gasoline-only version.

    Ford expects to produce about 20,000 Fusion and Milan hybrids this year, or about 1% of its total production.

    "It's a tough time to bring out almost any product right now," said George Pipas, the company's chief sales analyst.

    "But getting hybrids out right now is as much about image as anything else."

    In November, months before Honda even announced the price of its new Insight, Jim Johnson of Eagan, Minn., plunked down a $500 deposit for one.

    "I asked to be on the waiting list, and the salesman said he didn't have one," said Johnson, who works in investments. "So I said, 'OK, I want you to start a waiting list.' "
    More as in " much more" at the link -

    http://www.latimes.com/business/la-f...,6682265.story
    Last edited by AMERICA 123; 03-18-2009 at 12:29 AM.
    "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they're about to do it again."
    "The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
    "If America is circling the drain, Goldman Sachs has found a way to be that drain — " Matt Taibbi

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    Re: Hybrid car sales go from 60 to 0 at breakneck speed

    Now here is some more and here is the one funny part.

    As evident on the streets of cities such as Los Angeles and San Francisco, hybrids have an almost cult-like following, but getting the masses to buy them with any consistency is another matter.

    In their zeal to meet what seemed an insatiable appetite for hybrids in the middle of last year, carmakers may have gone too far, said IHS Global Insight's Lindland.

    At the end of June, AutoNation, the country's largest chain of new-car dealerships, had only a two-day supply of Honda Civic hybrids and a 14-day supply of the non-hybrid Civic.

    By year's end, the picture had flipped, with AutoNation holding 107 days' worth of regular Civics, compared with 148 days' stock of the hybrid version.

    In December, Toyota terminated plans to build the Prius in a $1.3-billion plant it had built in Mississippi, and Chrysler closed its only hybrid-producing factory.

    "The price of gasoline dictates what people buy," AutoNation Chief Executive Mike Jackson said.

    "Gas fell to $2, and now my lots are filled up with fuel-efficient cars that aren't moving."
    Consumers who do buy these days tend to focus more on present-day arithmetic than long-term commodity speculation.
    Three weeks ago, Jerome Haig, a lawyer in Torrance, put down a $500 deposit on a Fusion hybrid, even though he hasn't even test-driven one because they have yet to hit lots.

    "I do like the idea of getting a hybrid," Haig said.

    But he concedes that he might not have considered the car had it not been for a $3,400 tax credit < $3,450 ? >on Ford hybrids and a deduction on new-car sales tax.

    The latter was part of the $787-billion federal stimulus package.

    "The tax advantages are a pretty big incentive."
    A sales-tax deduction does little to move vehicles like the $74,085 Cadillac Escalade hybrid or the Lexus LS600h, which starts at $105,885.

    Neither gets better than 21 mpg, and buyers pay a premium over similar gasoline-only vehicles that would take decades for owners to equal in fuel savings even if gas hit $5 a gallon.

    So far this year, only 415 of the pair have sold nationwide.

    < Only 44 - 55 ? of that 415 were the Lexus LS600h - - so over 360 were the GM product.

    Lets just call this a 'courtesy' for Lexus advertising accounts, shall we ? >
    Still, some consumers see the depressed hybrid market as a buying opportunity.

    Chad Gallagher, a lawyer in Berkeley, took advantage of a Presidents Day promotion, plus a healthy measure of dealer desperation, to buy a fully loaded Prius last month for $5,000 under sticker price.

    "We got the touring package, leather seats, navigation, Bluetooth, everything," Gallagher said.

    "I think they were just happy to sell the thing."

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    Last edited by AMERICA 123; 03-17-2009 at 08:26 PM.
    "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they're about to do it again."
    "The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
    "If America is circling the drain, Goldman Sachs has found a way to be that drain — " Matt Taibbi

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    Re: Hybrid car sales go from 60 to 0 at breakneck speed

    Sounds like a good time for GM to be bringing out a $40k hybrid.

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    Re: Hybrid car sales go from 60 to 0 at breakneck speed

    Quote Originally Posted by page2171 View Post
    Sounds like a good time for GM to be bringing out a $40k hybrid.
    Serial and parallel hybrids are completely different worlds. All hybrids that are currently on the market are parallel hybrids, the Volt is the only Serial hybrid.

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    Re: Hybrid car sales go from 60 to 0 at breakneck speed

    It was cool to be "green" when the economy was great, but now who cares about driving a statement car. Its the exact same reason Hummer sales died.

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    Re: Hybrid car sales go from 60 to 0 at breakneck speed

    "and it will still cost $40K."

    Why don't we be honest about it, and call it what it is............... a PR move............ pure and simple.

    Now, I'm not saying that is a bad thing, as GM needs all the good PR it can muster................ it certainly will not help to pay off those "taxpayer" loans, now will it???

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    I wrote a commentary years ago about how a pricey hybrid can't touch a 4-cylinder wagon like the Ford Focus ZXW PZEV in bang for your buck. And how the Focus Wagon actually had more interior room than the so called "mid-size" Prius, not counting the much larger cargo area.

    While some Truck and SUV types might hardy-har-har this article or declare "Wagoner and Lutz were right!" -- they miss the point.

    People want fuel efficient cars.

    But in a craptastic economy like this one they'll go for the gasoline alternative that costs $5000 less.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    Quote Originally Posted by Ming View Post
    While some Truck and SUV types might hardy-har-har this article or declare "Wagoner and Lutz were right!" -- they miss the point.
    I guess I'm guilty here. In business profits talk, bull**** walks. Until GM small cars turn a profit, they just don't make business sense. GM's going to learn that lesson very harshly selling every Volt at a loss.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    As soon as gas prices go up again this summer, everybody will be talking about buying hybrids again. As long as gas remains, mostly, under $2.00/gal, hybrids won't be a priority.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    Quote Originally Posted by RamJet502 View Post
    I guess I'm guilty here. In business profits talk, bull**** walks. Until GM small cars turn a profit, they just don't make business sense. GM's going to learn that lesson very harshly selling every Volt at a loss.
    They've already learned the harsh lesson that relying only on the biggest vehicles for profits will burn them and that they need to figure out how to sell smaller ones for a profit.

    Or are we still living in the SUV-boom 1990's?

    Perhaps they should take your (unwritten) suggestion and go for an Isuzu-like lineup with all trucks and SUV's for the sake of short-term profit and just stop pretending they care otherwise - let us GM small car fans go elsewhere while they peddle $30-40K quad cab pickups as "the next family sedan".

    On the other hand, I agree -- the Volt is way too expensive to be anything GM can rely upon as a business model. At least until costs can be brought down, it's not a solution for GM's profit woes at all.
    Last edited by Ming; 03-17-2009 at 07:27 PM.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    Quote Originally Posted by V8Wolf View Post
    Gas is cheap again.
    For the moment. Which also conveniently subdues concerns about dependency on oil, including the political and environmental costs. And predictably gas prices are already starting to rise.

    An obvious point that this article overlooks is volume. It's only a matter of time before fuel efficiency and cost of ownership become major factors in vehicle purchases. The idea of a vehicle not employing some sort of hybrid or alternative system of power is going the way of the dodo. The costs will come down as the technology becomes an expectation.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    Quote Originally Posted by Ming View Post
    They've already learned the harsh lesson that relying only on the biggest vehicles for profits will burn them and that they need to figure out how to sell smaller ones for a profit.

    Or are we still living in the SUV-boom 1990's?
    I hope you're right because the truck and SUV goose stopped laying golden eggs. If GM can slash its overhead enough to make small cars profitable, they'll thrive. If they can't, they're toast.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    Quote Originally Posted by RamJet502 View Post
    I hope you're right because the truck and SUV goose stopped laying golden eggs. If GM can slash its overhead enough to make small cars profitable, they'll thrive. If they can't, they're toast.
    I don't really know what they can do right now except emulate Hyundai of America's success by importing GM Daewoos like the Cruze, Spark, Aveo and Orlando. If Hyundai, KIA, Honda, etc. can manufacture small cars overseas and reap the rewards and be profitable, why not GM? More UAW roadblocks?

    But they've already committed to building the Cruze here with UAW folks. Much as I love seeing those American jobs remain, if they can't build it profitably here, then GM loses - AGAIN.

    So build it where it makes the most profit-sense. And leave the Truck and SUV production here - because the huge profits on those can absorb the labor costs. Cadillacs, too, of course.

    GMNA has never really taken small cars seriously. They should fund GM Daewoo with the needed money and let them do it -- or let them operate on their own budget based on profitable sales of European and Chinese Chevrolets. Then import the best of those cars here.

    Make them in South America if that makes more sense. Just do something other than repeating the mistakes of the past over and over and over....
    Last edited by Ming; 03-17-2009 at 07:26 PM.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    Quote Originally Posted by Ming View Post
    I don't really know what they can do right now except emulate Hyundai of America's success by importing GM Daewoos like the Cruze, Spark, Aveo and Orlando. If Hyundai, KIA, Honda, etc. can manufacture small cars overseas and reap the rewards and be profitable, why not GM? More UAW roadblocks?

    But they've already committed to building the Cruze here with UAW folks. Much as I love seeing those American jobs remain, if they can't build it profitably here, then GM loses - AGAIN.

    So build it where it makes the most profit-sense. And leave the Trucks and SUV production here - because the huge profits on those can absorb the labor costs. Cadillacs, too, of course.
    Unfortunately I don't think trucks and SUVs will ever be as profitable. $15K in profit per truck or SUV would be better than Viagra for Rick W. and GM. The only way thats going to happen again is if they totally move production to Mexico, which I would hate, but may be their only choice.

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    Re: Expensive Fuel Efficient Cars: Hybrid Car Sales go From 60 to 0 at Breakneck Spee

    I say this again, and I say it again. Hybrids, especially the Pruis is more of a political statement then conserving fuel or protecting the environment. Needless to say, the Prius doesn't do both. I live in L.A and the type of people that are purchasing these cars are usually the ones with the Obama and Bin sticker on the back. It seems that they are willing to advertise their idiotic beliefs while economic conservatives are not allow to express theirs. I wonder what would happen if I were to put a Ron Paul sticker on my window? Will the Socialists go crazy?

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