Hybrids Don't Share September Sales Spurt

Hybrids Don't Share September Sales Spurt

By John O'Dell October 10, 2011

An otherwise sunny September new-car market was gloomy for sellers of advanced-drive vehicles. Nissan delivered more than 1,000 of its Leaf electric cars and Chevrolet resumed delivering Volt (above) plug-in hybrids to retail customers and got 723 out the door before the month ended. But with those two out of the way, September sales of rest of the advanced-drive segment, made up entirely of conventional (non plug-in) gas-electric hybrids, continued a downward drift that began in March. Although there are now 10 automakers marketing hybrids in the United States -- twice the number there were a year ago -- September advanced-drive sales fell by 15.1 percent to a total of 18,690 cars and SUVs, down from 22,022 a year earlier. That compares to a 10.7 percent increase in sales of conventional gasoline and diesel-fueled cars and trucks versus September 2010.

The economy certainly isn’t helping – times are tight for most Americans and hybrids and plug-in cars carry a technology premium that can add thousands to their purchase prices. There’s also increased competition from gasoline-only cars and small SUVs that make use of new fuel-efficiency technologies like turbocharging and direct-injection engines to return EPA-estimated fuel economy numbers that aren’t all that much less than some hybrids deliver. That’s especially attractive when they do it for thousands of dollars less. The fact that gasoline prices were lower in September than in previous months also worked against advanced-drive vehicles. People aren’t as committed to finding a new, highly fuel-efficient set of wheels when there’s money left in the weekly budget after filling up the present car’s tank. But Edmunds.com analyst Ivan Drury said that while all those issues were at play, much of the month’s malaise stemmed from lingering supply chain impacts from the earthquake and tsunami that ravaged Japan and its auto industry supply and delivery chain in March.

Selection Still Sparse
Edmunds.com data no longer shows any specific shortages of vehicles, but it also shows that inventories in the advanced-drive segment don’t appear to be as fat, and that’s due to continuing slowdown of shipments from Japan – where the bulk of the hybrids sold here are built. The average advanced-drive vehicle spent only 32 days on a dealer’s lot before being sold, while the average conventional vehicle lingered for 51 days. Jessica Fini, a spokeswoman for American Honda, said the company still isn’t back up to full production in Japan, “and that is directly impacting our hybrid sales.” Toyota spokesman Steve Curtis said much the same thing – the company’s September inventories “were down significantly, year over year.”

On car dealers’ lots that translated into “instances in which consumers looking for an advanced-drive vehicle might have been discouraged by a lack of selection in the models they were interested in, causing some delays of purchases,” said Drury. “It is difficult to say what sales would have been without the disaster in Japan,” he said, “but with advanced-drive vehicle sales for the first eight months of the year down by only 4,852 cars and trucks from the same period last year, it is pretty safe to assume that 2011 sales otherwise would be ahead by now.” They might be picking up soon if inventories are the big hang-up. Both Honda and Toyota expect to be increasing hybrid shipments to their U.S. dealers this month. “We’re going to start seeing growth in year-over-years sales in October, and that will continue for the rest of the year,” said Toyota’s Curtis.

No September Gains
Instead, none of the 17 models in the segment that also were on sale in the United States a year earlier posted September sales that were above those of September 2010. This September’s sales for most of the models were down by 50 percent or more, and with rare exception, those are the advanced-drive models with the highest sales volumes.  There are 30 models in the market now – and more coming in the next few months as Mitsubishi readies its four-passenger “i” electric city car for a November launch, Toyota readies a plug-in version of the Prius and Ford Motor Co. prepares a quartet of advanced-drive vehicles including a conventional hybrid, a plug-in hybrid and two all-electric models. But most of the newest entries on sale now are high-end models like BMW’s ActiveHybrid7, the Mercedes-Benz S- and M-Class hybrids and Porsche’s hybrid Cayenne SUV and its Volkswagen Touareg hybrid cousin. Their price tags, all well north of $50,000, almost guarantee them low-volume status. And that has helped keep a lid on growth in the segment.

Nine-Month Picture
Thus Toyota’s Prius remains top dog in the advanced-drive market. The gas-electric hybrid starts at $22,120 and with 9,325 sales captured a 49.9 percent share of the September advanced-drive vehicle market. But even the king was laid low by September’s circumstances -- Prius sales were down 18.2 percent from a year earlier. One month doesn’t make a trend, but with sales for the first nine months of the year at 93,243, the Prius still fell almost 10 percent short of its January-September tally of 103,334 sales in 2010.

But the Prius isn’t alone. For the first nine months this year the entire advanced-drive segment was down 2.4 percent with total sales of 1934,749 hybrid and electric cars and trucks versus 198,601 for the same period last year. The convention passenger vehicle market, by comparison, posted a 10.4 percent gain. Not even the addition of the   Leaf and Volt could help the inventory constrained advanced-drive segment, although both were highly publicized cars with price tags made more palatable by $7,500 federal tax credits. Both cars, however, have been sold only in limited regions until now. As GM and Nissan expand their sales and competitors’ plug-in hybrids and battery electric models hit the market, helping increase consumers’ familiar with the concept of cars with plugs, sales volumes should rise and help pull the advanced-drive segment out of its slump.

Toyota: Down, But Still on Top
With a total of eight hybrids now in its corporate stable – five in the Lexus stall and three on the Toyota side – Japan’s largest automaker has the broadest array of advanced-drive offerings in the U.S. market. Its selection will grow as it adds to its Prius family with wagon and compact hybrids and the long-awaited plug-in model. For September, Toyota and Lexus combined for 12,123 advanced-drive vehicle sales, an 18.5 percent drop from 14,871 a year earlier. For the first nine months, the automaker’s dealers sold 122,050 Toyota and Lexis hybrids, down 12 percent from the first three quarters of 2010.

While the Prius’ 9,325 September sales were down 18.2 percent, the Camry hybrid painted a much more dismal picture for the Toyota brand’s advanced-drive sales. September sales of 229 Camry hybrids represented a 79.3 percent plunge from 1,104 sales in September 2010. The Highlander hybrid SUV posted 218 sales, down 58.3 percent from a year earlier.

The Lexus CT 200h sporty compact hybrid was the company luxury marques’ star, an indication, perhaps, that hybrid buyers aren’t as interested in size and space as in price. The much larger and more powerful Lexus hybrid sedans and crossover couldn’t combine their sales to come close to the 1,444 that the CT 200h racked up for the month. The car is new for 2011 so there are no year-ago sales for comparison. The next-best seller among Lexus models was the RX 450h hybrid crossover, with 650 September sales, a 41.5 percent drop from the year-earlier tally of 1,112. The HS 250h sedan brought another 231 buyers into Lexus stores, down 67.5 percent from September 2010; the GS 450h sedan accounted for 18 sales, unchanged, and the pricey LS 600h hybrid tallied 8 sales, down 11.1 percent.

Ford: A Big Tumble
Despite a 39.7 percent plummet from a year earlier, Ford’s September advanced-drive vehicle sales of 1,573 cars and SUVs was good enough to haul it into second place in the segment, up from the unaccustomed position of fifth in advanced-drive sales it found itself in at the end of August. For the first nine months, sales of 10,773 hybrids represented a 40.6 percent tumble from the volume reached in the first three quarters of 2010. Ford’s Fusion hybrid sedan, a hot seller a year ago, has been suffering lately with competition from its upscale but competitively priced Lincoln MKZ hybrid sibling. Sales of the gas-electric Fusion were down 67 percent while Lincoln salesmen moved 455 MKZ hybrids off the lots – up from just 10 a year earlier when the model was still in its early introduction phase. Ford’s third advanced-drive model, the Escape SUV hybrid, has seen slowing sales as inventories dwindled with the close of the model year. Dealers sold 552 Escape hybrids in September, down 28.6 percent from a year earlier. October won’t be kinder -- Ford announced this week that it will discontinue the hybrid version of the Escape when the redesigned 2012 model is launched. The company will replace it with the hybrid version of the new C-Max all-purpose van.

Honda: A Little Brightness
While Honda Motor’s 1,355 September advanced-drive sales were nothing to brag about -- the company did more than double that a year earlier, posting 3,582 sales in September 2010 -- its nine-month tally was one of three small bright spots in the year-to-date lineup. Honda’s three models combined for 26,946 sales in the first three quarters of the year, up 17.6 percent from the same period last year. September’s Honda hybrid leader, with 537 sales, was the CR-Z sport hybrid, but that total was down 56.6 percent from the previous September’s 1,236. The Insight hybrid, with 512 September sales, was off 69.5 percent from a year earlier. Inventory-challenged Honda also leased one of its fuel-cell electric FCX sedans -- a limited production model available only in Southern California under a special test program.

Nissan: Leveraging Leaf
Sales of 1,293 hybrids and EVs -- with the emphasis on EV -- let Nissan hold its chin up in September as one of only three manufacturers with September advanced-drive sales growth. The company sold just 511 hybrids a year earlier. Nissan delivered 1,031 Leafs during the month and opened sales of the all-electric compact hatchback in nine more states during the month. Nissan says the Leaf will be available nationally by the end of 2012. The automaker also sold 217 Altima hybrid sedans in September, down 57.5 percent from a year earlier. The gas-electric version of the Altima, sold in only seven states, is being phased out for the 2012 model year while Nissan develops a new hybrid drive system. The company’s Infiniti division sold 45 of the newly introduced M35 hybrid sedans, which use a new Nissan-developed drive system rather than the old Altima system Nissan licensed from Toyota. For the first nine months this year, Nissan (and Infiniti) sold 10,431 advanced-drive vehicles, almost double 2010’s nine-month tally of 5,221. All of the growth came from the Leaf -- 7,180 sold since the beginning of the year and 7,199 since its introduction in December.

Hyundai: Holding Down Fifth
September Hyundai sales of 1,273 hybrids is impressive because, unlike the multiple-model members of the top five club, it topped the 1,000 mark with just a single offering – the 2011 Sonata hybrid. Hyundai still doesn’t release separate sales numbers of the gas-electric model, maintaining that all of its cars are fuel efficient and that hybrids should’ be singled out. But registration data collected by Edmunds.com provides data that closely corresponds to monthly sales.  The Sonata hybrid is new this year, so there are no September 201 sales for comparison.

General Motors: Volt Carries The Load
It has five hybrids in its stable – second only to Toyota in the number of advanced-drive offerings – but General Motors seems to have abandoned the conventional hybrid market in favor or its range-extended plug-in hybrid Volt.  That means that despite an impressive array of nameplates, GM’s sales performance is pretty uninspiring. It sold just 849 advanced-drive cars and trucks in September. That made it the third company with a gain for the month with a September advanced-drive sales tally almost double the 450 it sold a year earlier. All of the gain came from the 723 Volts delivered during the month. For the first nine months, GM sold 6,412 hybrids including 3,895 Volts.

Among its other offerings in the segment, the Chevrolet Silverado 1500 dual-mode hybrid pickup was the leader -- but with just 75 sales it was down 62.6 percent from a year earlier. The GMC Yukon SUV hybrid was next with 16 sales, down 66.6 percent, followed by the Chevy Tahoe hybrid and Cadillac Escalade hybrid SUVs, tied at 14 sales each. That was a drop of 83.5 percent drop for the Tahoe and 83 percent for the Caddy hybrid. The GMC Sierra 1500 hybrid pickup brought up the rear with seven sales, down 77.4 percent from September 2010.

The Final Four
New to the advanced-drive market this year and clustered at the bottom of the heap because of their pricey, low-volume hybrid models, Porsche, Mercedes-Benz, BMW and Volkswagen round out the September advanced-drive sales chart, in that order. Combined, the four accounted for 1.2 percent of the segment’s sale for the month. While there were no year-earlier sales for comparison, their combined market share was up from 1 percent in August.  Porsche, with just one model, the Cayenne S hybrid SUV, posted 112 sales. September sales for Mercedes-Benz, with three models, totaled 83: the S-Class hybrid lead the pack with 72 sales, followed by the M-Class hybrid SUV with seven and the B-Class fuel-cell electric, offered only in California in a special test lease program, with four sales. BMW’s hybrid pair accounted for 15 sales -- nine for the ActiveHybrid7 and six for the just-discontinued ActiveHybrid X6 – while Volkswagen’s Touareg hybrid was good for 14 September sales.

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