Demand slackens for bigger hybrids

US demand for big, petrol-electric hybrid vehicles has flagged in recent months, raising questions about consumers’ willingness to pay extra for cars and sport-utility vehicles which are marketed on the basis of enhanced performance rather than fuel savings.

Toyota, Honda and Ford have all offered discounts and other incentives on their larger hybrid models in an effort to improve flagging sales. Sales of Toyota’s luxury Lexus RX400 hybrid SUV tumbled to 1,190 vehicles in June, fewer than half the number a year earlier, according to Ward’s Automotive. The hybrid version made up 20 per cent of total RX400 sales in June, compared with Toyota’s target of 25-30 per cent.

Demand for the hybrid version of Honda’s Accord sedan was down by 59 per cent in the first six months. Sales of Toyota’s Highlander SUV hybrid also dropped sharply in June. Toyota has been in the forefront of marketing hybrids for their performance. It contends that the extra power boosts a V8 engine to achieve performance comparable with a V12.

But Lonnie Miller, director of industry analysis at RL Polk, a Michigan-based consultancy, said that one drawback of pitching hybrids as mainstream vehicles was that “there are enough people out there who know that it does cost more to get into these vehicles”.

For instance, the Highlander hybrid typically costs $3,000-$5,000 more than the conventional version. Several reviewers have noted that hybrid SUVs offer little more fuel economy than their combustion-engine equivalents.

A spokesman for Honda’s US subsidiary said: “It’s easier to gain the benefits of hybrids from the smaller vehicles.” According to Edmunds.com, an online car pricing service, Honda is currently offering a $750 incentive to dealers on the Accord hybrid.

Demand for the smaller Toyota Prius hatchback, by far the best-selling hybrid, and Honda’s new Civic sedan remains strong. Pak Lam, fleet manager at a Toyota dealership in San Jose, California, said Prius buyers had to wait 4-6 weeks for delivery. “We don’t have any stock,” he added.

In spite of sagging demand for some models, Toyota is pressing ahead with hybrid development. “Make no mistake about it, hybrids are the technology of the future and they will play a starring role in the automotive industry in the 21st century,” Jim Press, head of the carmaker’s US operations, said earlier this week.

Toyota is currently developing a “plug-in” hybrid that uses a larger battery pack, allowing the vehicle to travel longer distances at higher speed without using a combustion engine.

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