||Market Improves for EVs, Hybrids
The market for hybrids, plug-in hybrids and electric vehicles is perking up, just when many were ready to write it off.
In the first three months of 2012, U.S. sales of hybrids, plug-in hybrids and EVs shot up 44 percent from the year-ago quarter, to 113,457. March sales of those vehicles were double those of January.
It was a breakout quarter for sales of vehicles with alternative powertrains, which had been rising at a much slower pace than expected despite waves of fresh entries.
The strong performance is a measure of validation for automakers that have persevered despite tepid demand for hybrids and criticism in political circles.
Hybrids accounted for the bulk of alternative powertrain sales -- 106,207, compared with 7,250 EVs and plug-in hybrids.
Sharper sales of the longtime hybrid king, the Toyota Prius, drove much of the growth as buyers snapped up recently launched models, including a wagon and subcompact. Also providing a lift: launches of General Motors' mild hybrid technology, dubbed eAssist, on volume models such as the redesigned Chevrolet Malibu, released in February.
Plug-in hybrids and pure EVs still represent a tiny -- albeit growing -- slice of the market for electrified vehicles. Sales of the Chevrolet Volt plug-in hybrid easily hit their highest mark yet in March. The Nissan Leaf electric car sales nearly quadrupled from the first quarter 2011, to 1,733 units.
In the press -- and in political circles eager to find fault with public and business strategies promoting alternative powertrains -- hybrids, plug-in hybrids and EVs have taken a beating.
As recently as January, Bloomberg reported that "slow hybrid sales have brought a dose of reality" to the industry. Also that month, Automotive News noted the "tepid" response by consumers to the industry's growing menu of hybrids and EVs.
Surging fuel prices have helped change that. Through last week, U.S. gasoline prices are up 19 percent since the start of the year, to a nationwide average of $3.87 a gallon.
But that doesn't explain fully the jump in hybrid, plug-in hybrid and EV sales. During the last two gasoline price spikes, in the summer of 2008 and the spring of 2011, the market share for hybrids, plug-in hybrids and EVs didn't crack 2.2 percent.
Analysts and dealers point to two other factors that are helping to drive sales higher this time: Pent-up demand and new models that are drawing people who never before had found what they wanted in an hybrid -- a wagon, for example, or one with a price they could afford.
Last year production of the Prius was slashed because of the March 2011 earthquake.
"This year that supply problem has largely been solved, and you're seeing increased demand on top of it," says Alan Baum, an industry consultant in suburban Detroit who tracks hybrid technology. "We're going to see hybrid sales only get stronger in coming months."
With gasoline prices spiking last month, Leonard Northcutt, an Oklahoma dealer who sells Toyota, Chevrolet and Buick vehicles, sold all seven Priuses on his lot over a 10-day stretch. Normally that would have taken at least 45 days, he says.
Northcutt says some of those buyers considered a Prius last year but were deterred by high prices stemming from the tight supplies.
"I think some people are saying 'Uh-oh, I've seen this before,'" Northcutt says. "They already worry that gas prices are headed above $4 so they want to do something before it gets to that point."
Toyota's new Prius models also are attracting buyers, says Zion Rowan, direct sales manager at Toyota Sunnyvale in California. Toyota launched the Prius V wagon last fall. Last month the Prius C subcompact and Prius plug-in hybrid debuted.
"A lot of Prius V buyers have told us that they've been waiting for more cargo space and room in the back seat," Rowan says.
The lower price of the Prius C -- about $4,000 below that of the regular Prius liftback -- finally has put hybrid technology within reach for many buyers, says Ben Mitchell, Toyota's corporate manager of product planning. He says the base model Prius C, which stickers for $19,710, including freight, and gets 53 mpg in city driving, is selling fastest.
"For the vast majority of Prius C buyers, this is their first hybrid," Mitchell says.
Toyota sold 27,800 Priuses in March, up 49 percent from 18,605 a year earlier. The new models made the difference: Toyota sold 4,937 Prius Vs, 4,875 Prius Cs and 891 Prius plug-in hybrids.
Other hybrids have hit the market, too. In the first quarter Hyundai sold 4,968 units of the Sonata Hybrid, which was launched in May 2011. GM sold 1,767 Chevrolet Malibu Ecos and 3,146 Buick LaCrosses with eAssist. Neither was in its lineup a year earlier.
An auto with eAssist is called a mild hybrid because the small electric motor can't propel the vehicle on its own. It simply assists the gasoline engine in certain driving conditions.
In all, there are 41 hybrids, plug-in hybrids and EVs sold in the United States today, up from 19 in 2008, IHS Automotive senior consultant Paul Lacy says.
At the Al Serra Auto Plaza near Flint, Mich., Chevrolet sales manager Jim Purves is "way more confident" in the sales potential of the Volt than he was just a few months ago.
Says Purves: "People are getting more familiar with how the car works. That's expanding the customer base."
(Source: Automotive News, 04/23/12)
Click here to email to client
Back to Radio Sales Today
Click here to view Job Postings.
Upcoming Webinar: Consultative Selling of Multi-Media
Join RAB's Brandeis C. Hall and Jon Erdahl, president of 3D MediaVentures, for this informative webinar and learn the power of a consultative selling and marketing mix.
Find out what advertisers expect from radio sales professionals in client meetings, as you explore new CNA questions that correspond to today's changing marketing landscape. You'll come away with a list of recommendations tailored to various advertiser objectives, and a host of proven integrated marketing ideas.
This webinar will be offered on Tuesday, May 8, at 3 PM (Central), and again on Thursday, May 10, at 10 AM (Central). For more information, click here.