US Sales of Gasoline-Electric Auto Sales Drops 9.9%

Here is some more bad news as concerns the auto industry. 2008 saw a decline of hybrid vehicles totaling nearly 10%. When gas prices skyrocketed, hybrid sales increased and Toyota Prius's actually sold for more than the MSRP. Now that gasoline is less than two bucks a gallon, prices have dropped. Further complicating matters is the global economic bust created by unscrupulous banking practices. Now automakers are up against the ropes and are torn between offering hybrids or promoting less expensive gas guzzlers.

Here is the main question; "What would you as a consumer do?" Considering the low price of gas and the premium price tag on a hybrid vehicle, are you going to spend more for the new technology? Apparently, car buyers are staying home and are not willing to commit to a new car purchase. Let's hope that our economy reverses course soon and hope that car manufacturers deliver reasonably priced alternative energy cars and trucks. The Honda Insight is one such vehicle and is expected to sell for 18 to 20 thousand MSRP.

From Automotive News:

U.S. sales of gasoline-electric hybrids fell 9.9 percent in 2008, after rising with gasoline prices early in the year and falling along with fuel costs and a collapsing auto market at the end.

Automakers sold 315,761 hybrids last year, 2.4 percent of the total vehicle market.

Toyota Motor Sales U.S.A. again sold about three of every four hybrids in the United States, despite new entries from General Motors. The segment-leading Toyota Prius reflected the topsy-turvy year: It tallied 91,440 sales in the first half and 67,444 in the second.

U.S. Hybrid Vehicle Sales
		2008	2007	% change
Chrysler LLC		81	-	-
Ford Motor Co.		19,522	25,108	-22.2%
General Motors		14,439	5,175	179.0%
American Honda		31,495	35,980	-12.5%
Nissan N.A.		8,819	8,388	5.1%
Toyota Motor Sales		241,405	275,779	-12.5%
TOTAL		315,761	350,430	-9.9%
Source: Automotive News Data Center, companies and National Renewable Energy Laboratory

"At $1.50 a gallon, the American public is not willing to pay for fuel-saving technology," GM Vice Chairman Bob Lutz said at last week's Detroit auto show.

American Honda Motor Co. and Toyota each sold 12.5 percent fewer hybrids last year than in 2007.

Ford Motor Co., No. 3 in hybrid sales behind Honda, suffered the greatest decline, down 22.2 percent. GM nearly tripled sales to 14,439 after adding hybrid versions of the Cadillac Escalade, GMC Yukon and Chevrolet Malibu and Tahoe. Honda sold one hybrid for every eight Toyota delivered.

Fuel prices changed habits

Consumers changed their buying habits when gasoline prices passed $3.50 a gallon in April, Fin O'Neill, president of the market research firm J.D. Power and Associates, said in a speech last week in Detroit. After topping $4 in July, fuel prices tumbled to an average of $1.62 per gallon last month.

The sliding cost of gasoline coincided with a global financial crisis that squeezed credit and dragged vehicle sales to 25-year lows in the fourth quarter.

Hybrids weren't immune. Prius sales in November and December plunged more than 45 percent, prompting Toyota to delay plans to build the car in the United States.

The abrupt shift in Prius demand shows that fuel-efficient vehicles lose some appeal when gasoline prices are low, AutoNation Inc. CEO Mike Jackson said Wednesday at the Automotive News World Congress. A government that mandates fuel efficiency should use a fuel tax to encourage consumers to buy energy-saving vehicles, he said.

"Cheap gasoline combined with fuel efficiency mandated by the government is an economic and environmental disaster for America," Jackson said. "When the cost per mile driven goes down, people buy bigger, faster" cars and trucks, he said.

But consumers do want fuel-saving technology, other speakers told the World Congress.

'Catching up'

"North America is catching up with the rest of the world -- particularly the North American consumer -- on the importance of these things," said Harold Krivan, president of the consulting firm Sawgrass Solutions LLC.

For now, automakers need to bring green technology's cost in line with its value to consumers, said Andrew Brown Jr., chief technologist at Delphi Corp.

"People want the technology, but it's got to be economical," Brown said. "That's the challenge in the industry now: to get the cost of those components down."

Most of the figures for hybrid sales come from automakers; the National Renewable Energy Laboratory provides estimates for Nissan, along with the 2007 totals from GM that were used to calculate its gains for last year.