2009 Hybrid Sales: Toyota Slows as Competition Gains; Ford Is Big Winner

2009 Hybrid Sales: Toyota Slows as Competition Gains; Ford Is Big Winner

By John O'Dell January 7, 2010

By John O'Dell, Senior Editor

As the woes that piled on us in 2009 are tallied, one that surely will be in the top 10 was the disaster that was the auto industry and annual auto sales, which fell to their lowest level since 1970.

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Ford Fusion hybrid pushed Ford to within a percentage point of overtaking Honda in annual U.S. hybrid sales.

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But while cars and trucks overall didn't fare well in the recession-ravaged economy, sales of hybrids were surprisingly strong.

A review of sales data for the 2009 shows that hybrids had their third-best year since the first sales were recorded in the U.S. in 1999.

In all, automakers sold 290,231 gas-electric cars and trucks.

The performance, while down 6.8 percent from 2008, was spectacular compared with sales of non-hybrids, which plunged 21.4 percent for the year.

Good, Not Great

Hybrids were helped by factors that included the launch of several new models; federal tax credits and substantial year-end incentives on some; and a short summertime rise in gasoline prices that spurred a July and August sales bump for fuel efficient models.

Hybrid sales have dropped since 2007 peak while market share has grown.

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That's not to say that green car boosters should be dancing in the streets.

"I'd think that with the new models that were introduced, hybrids' overall market share ought to be higher than it is," said Jessica Caldwell, Edmunds.com's director of industry analysis.

While the year's 2.78 percent market share is the highest ever for hybrid vehicles - thanks to the arrival of six new models including the relatively hot-selling Ford Fusion hybrid, "it really should be up over 3 percent by now," said Caldwell.
 
"The culprit is the price difference. Hybrids are more expensive and in a recessionary year that didn't help."

Automakers with hybrids found it necessary to pile incentives onto many of their previously incentive-free hybrid models all winter to move them off the lots, she said.

Addtionally, sales of truck-based hybrids - a segment General Motors Corp. has been betting big on -  weakened substantially as motorists seekign the most fuel-efficient vehicles increasingly turned to hybrid cars. Trucks and SVs made up just 18 percent of all hybrid sales while accounting for

One hybrid car that didn't gut much help from the factory was Toyota's Prius, which remains the best-selling hybrid in the market but in the absence of an aggressive incentive campaign saw annual sales fall 12.1 percent - to 139,682 from 158,884 in '08.

Toyota Motor Corp.
Toyota

In addition to having the perennial best seller among hybrids with the Prius, Toyota has the most niche models - in its Lexus lineup - including the hybrid with the smallest annual sales number, the $110,000 LS 600h L, a long wheelbase luxe sedan that attracted only 258 buyers for the entire year.

Still, the automaker - with seven hybrids in its corporate stable, three Toyotas and four Lexus models - remains the segment's 500-pound gorilla. Toyota dealers posted total sales of 195,545 gas-electric cars and SUVs last year.

It is losing ground, though, in the face of increased competition as other automakers bring hybrid models to market. Combined Toyota and Lexus hybrid volume accounted for 67 percent of the segment's sales in 2009, down from 77.5 percent in 2008, while each of the four other automakers with hybrids in the market posted year-over-year gains (chart, above), on the strength of new models and big incentives.

Sales of Toyotas' Camry hybrid were down 50.5 percent for the year and Highlander hybrid SUV sales fell by 42.8 percent.

Lexus
On the Lexus side of Toyota's hybrid lineup, sales of the RX 400h were off 4.8 percent while two low-volume models fared far worse - the LS 600h L plunging 74 percent
and the GS 450h sedan down 29.5 percent.

The new-in-August HS 250h entry-level Lexus hybrid posted a nice one-month gain of 40.7 percent in December to end the year with a total of 6,699 sales.
 
Honda Motor Co.

Honda remains a distant No. 2 in the hybrid segment, with 35,692 sales in 2009 representing a 13.3 percent gain from 2008 and giving it a 12.3 percent hybrid market share.

"That's quite respectable, considering they did it with only two models, the Civic and Insight hybrids" said Edmunds.com analyst Ivan Drury.

"If you think about the Insight's shortcomings it makes the second-place finish even more astonishing," he said.

The Insight, launched with great fanfare in in March as Honda's Prius fighter - and priced about $3,000 less than the base Prius - was expected to top the 50,000 mark in 2009 but finished the year with just 20,572 sales.

While critics generally like the Insight's handling and performance, its compact size and run-of-the-mill (for a hybrid) fuel economy weren't enough to overcome the Prius' popularity although it was December's third-best selling hybrid, behind the Prius and the new Lexus HS 250h.

Honda's aging Civic hybrid ended the year down almost 52 percent with 15,119 sales versus 31,297 in '08.

Ford Motor Co.

Ford Motor Co.'s Ford Fusion and Mercury Milan hybrid sedans, new in 2009, more than made up for slumping sales of its aging hybrid SUVs, the Ford Escape and Mercury Mariner.

Ford ended the year just behind Honda with 33,502 hybrid sales, up a hefty 71.6 percent for an 11.5 percent share of the segment.

The Fusion hybrid sedan, new in March, was the star of the lineup with annual sales of 15,554. Mercury dealers sold 1,468 of its twin, the Mercury Milan hybrid,

The company's hybrid SUVs didn't do so well, though, the Escape falling 13.6 percent for the year and the Mariner off 29.8 percent, bit victims of age and a continued turn away from hybrid trucks as more passenger cars are outfitted with fuel-saving hybrid-electric technology.

General Motors Corp.

Although GM had more hybrid models than anyone in 2009 (that changes this year with the death of the Saturn brand), its eight models combined for just 16,135 total sales - good for fourth place and a scant 5.6 percent share of the hybrid market.

GM - which introduces the Volt extended range, electric hybrid at the end of this year - will go through almost all of 2010 with no hybrid passenger cars - just pickups and SUVS - as it closes its Saturn division and drops the Chevrolet Malibu mild hybrid from its lineup.

"That's going to be detrimental when car-based hybrids are 82 percent of that market," said Drury.

None of its hybrids were available for the full year in 2008, so annual comparisons are out. But on a December versus December basis, five of the six GM hybrids sold in both years saw December '09 sales plunge.

Not a good sign when most other hybrids saw December '09 sales outshine their 12th month performance the prior year.

The exception was the Saturn Aura - which was practically being given away as dealers of the now defunct brand hustled to empty their lots. Aura hybrid sales more than quadrupled in December, to 159 from a mere 34 a year earlier.

The other Saturn hybrid, the Vue Greenline SUV, saw sales for December drop 45 percent form December '08 levels.

The Chevy Malibu hybrid posted full-year sales of just 4,162 with a 71 percent drop in December sales versus December of 2008. 

The model has been dropped for 2010 because its mild hybrid technology (stop-start at idle and a slight electrically assisted boost for acceleration)  no longer makes sense as advances in conventional engines and transmissions have made less-expensive conventional models nearly as fuel efficient for substantially less cost.

The base 4-cylinder Malibu, for example, is rated at 22 miles per gallon in the city and 33 on the highway, versus 26 city and 34 highway for the hybrid, which costs $2,000 more. And the Malibu hybrid's fuel economy pales when compared to the Ford Fusion hybrid's rating of 41 mpg in the city and 37 on the highway.

GM's remaining hybrids, the Chevy Silverado and GMC Sierra pickups and Chevy Tahoe, GMC Yukon and Cadillac Escalade SUVs, all posted relatively low sales for the year, the Tahoe hybrid doing best with just 3,301 models sold.

All face an uncertain future as expectations of increasing gas prices keep a damper on truck sales.

Nissan Motor Co.

Nissan finished last in the hybrid category, not unexpected as it had just one model in 2009 and sold it in only 8 states that adhere to California's tougher-than-federal emissions rules.

Although it is launching a hybrid-electric version of its Infiniti M35 sports sedan later this year, Nissan has never been big on hybrid technology, figuring that it is an expensive way to offer improved fuel economy.

Instead the company has been working on all-electric drive and plans to launch its first model, the rechargeable Leaf hatchback, in the U.S. and Japan later this year and says it will have as many as many as four EV models by 2013.

Nissan dealers in the company's hybrid states, meantime, sold 9,357 Altima hybrid sedans last year, a 6 percent gain from 2008 sales and enough to give the company a 3.2 percent share of the segment.

"We expect similar results from Nissan this year," said Drury. "The Infiniti M35 hybrid isn't likely to add much to their hybrid volume considering the standard M lineup only accounted for 8,501 sales for all of 2009."

Looking Ahead

The big question as we start a new year is how hybrid sales will continue to fare with green consumers focusing now on the limited production EV - the Nissan Leaf - and the rechargeable, extended-range electric hybrid - the Chevy Volt. Both are due toward the end of the year.

Will talk of more EVs and extended-range plug-in hybrids dim hybrids' star?

The need by automakers to substantially boost fleet fuel economy to meet the federal requirement for a 35.5 mpg average by 2016 could make hybrids an increasingly critical part of major automaker's fuel-efficiency strategies.

But unless - or until - gasoline prices rise significantly, the hybrid technology premium will have to fall to make them big sellers, especially as more automakers spice up their offerings with fuel-efficient smaller cars from their European lineups.

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.