Hybrids Finish 2008 in the Dumps, With Prices Weakened and Sales Down
By John O'Dell January 6, 2009By John O'Dell, Senior Editor
December's gas-electric car and SUV sales plunged almost 43 percent from the final month of 2007 as the year wound up on a discouraging note for the only alternative technology vehicles to so far make a dent in the auto market.
It was a near repeat of a stupendously disastrous November, when sales of fuel-efficient hybrid vehicles fell 50 percent from a year earlier.
For all of 2008, hybrid sales tumbled 10.3 percent with 310,724 models sold. While nothing to boast about, the hybrid segment bested the overall market's performance of an 18.2 percent drop for the year, according to Edmunds.com statistics.
The only bright spots were that hybrid sales in December actually rose a bit from November, and that 2008 hybrid sales were the second-best on record in the decade since 1999, when Honda introduced the first model, the now-discontinued two-seat Insight. The year's sales trailed only 2007, when 346,431 hybrids were sold.
Incentives Made the Difference
The 6.8 percent rise in sales volume from November to December was due to hefty incentives and discounting by most automakers and to an especially effective financing program that General Motors' financing arm provided for almost all of the company's lineup.
Industrywide, the same pricing and financing incentives led to a one-month sales gain of 20 percent.
In the hybrid segment, December's total of 17,652 sales was the second lowest of the year, trailing only November's dismal 16,536.
After that, you'd have to go back to January 2007, when only 17,591 gas-electric cars and sport-utes were sold, to find a worse month for hybrids.
Triple Whammy
The reasons for the year-end's paltry performance were unchanged from November: the one-two combination of falling gas prices and premium sticker prices followed by the knock-out punch of a global economic melt-down that has many consumers abandoning the idea of making major purchases any time soon.
The impact of soft fuel prices was particularly devastating as many hybrid buyers use the vehicles' fuel economy to justify their higher purchase prices of a few thousand to almost $9,000 above comparably equipped conventional gasoline models.
When gasoline was $4 a gallon in the summer, carmakers with hybrids in their lineups couldn't keep them in stock and many were charging steep premiums over MSRP.
Now, though, with gas below $2, many hybrids are selling for less than sticker - and some sit for weeks on dealers' lots.
Take the Prius, Please
In the case of the world's best-selling hybrid, the Toyota Prius, the change is particularly telling.
At the peak this summer, many dealers were demanding - and getting - as much as $5,000 over sticker for Priuses, said Jesse Toprak, Edmunds.com's executive director of industry analysis.
But in December, average transaction prices were close to dealer invoice, or as much as $2,000 below sticker and a $7,000 price decline from the market peak, he said.
Even with that kind of price cut, December's Prius sales were down almost 50% from July, when both gas prices and demand for hybrids were soaring.
Big Hits
"It shows how quickly things change based on gas prices," Toprak said.
For the full year, Prius remained the industry leader with 158,884 sold. But that was down 12.3% percent from 2007.
And the Prius fared fairly well compared to some other hybrids.
Hardest hit of the 16 models tracked by Edmunds for the full year was the Lexus GS450h luxury hybrid sedan. Sales for year fell 59.3 percent.
Mercury's Mariner hybrid SUV was next, with a 35.2 percent sales decline for the year, followed by its twin, the Ford Escape SUV hybrid, down 20 percent; Toyota's Camry hybrid, down 15.1 percent; the Toyota Highlander hybrid SUV, down 13.2 percent, and the Lexus RX400 hybrid crossover, with a 12.1 percent drop for the year.
The final loser on the list was Honda's Civic hybrid sedan, down 4 percent for the year.
A Few Winners
Nissan's Altima hybrid sedan (right), sold in only and handful of states, was the only model to post an increase in 2008, up 5.2 percent on the strength of strong summer sales followed by an incentive-driven bump in December, when sales doubled from November.
GM's hybrids, all new for 2008, don't have '07 tallies to compare to.
But on a one-month basis, all but the Saturns posted big gains in December over November. Chevrolet Malibu hybrid sedan sales rose133 percent for the month; the Tahoe SUV hybrid was up 143 percent; sales of the GMC Yukon hybrid SUV rose 133 percent, and Cadillac Escalade hybrid SUV sales climbed 77 percent.
Sales of the Saturn Aura hybrid sedan were down 24 percent for the month, and sales of the Saturn Vue Greenline mild hybrid were unchanged from November.
None of the GM hybrids were on sale for the full year, however, and all were low-volume models. The automaker tallied just 9,475 sales during the year for the six hybrid models combined.
Industry Tallies
By manufacturer, the year's hybrid tallies broke down this way:
- Ford Motor Co., 19,522 sales, down 22.2 percent for the year;
- General Motors Corp., 9,475 sales versus none in 2007;
- Honda Motor Co., 31,495 sales, down 12.5 percent for the year;
- Nissan Motor, 8,827 sales, up 5.2 percent;
- Toyota Motor Corp., 241,405 sales, down 12.8 percent.
Toyota, including its Lexus models, took a 74.4 pent share of the hybrid market in 2008, followed by Honda at 10.1 percent; Ford at 6.3 percent, GM at 3.1 percent and Nissan at 2.8 percent.
LEAVE A COMMENT