Fuel prices have undercut hybrid sales
Interest has waned since gas prices dropped from $4 a gallon
  • Everett Harrison, a resident at Willow Valley, checks out the cargo area of the new Honda Insight.

  • Honda's hybrid uses an electric motor between the engine and transmission.

  • A 2010 Honda Insight on the floor at Jones Honda.

  • Honda's ECON dashboard button adjusts engine output to conserve energy and increases regenerative battery recharging during deceleration.

By PAUL FRANZ
Published May 17, 2009 00:04

Going green may be all the rage these days.

Unfortunately for struggling automakers, hybrid cars are a tough sell.

"Anytime gas prices go up, hybrid sales go up," said Crystal Rowe, sales manager at Jones Honda in Lancaster. Sales of "any economical car goes up."

Indeed, as gas prices have fallen, so have sales of hybrid vehicles.

"People interested in the environment and fuel savings still are a very select market," said Dennis Silvius, general sales manager for Chapman Ford in Lancaster. "Not every American is going to drive a hybrid vehicle or take an interest in it."

Unless, of course, all conventional cars are replaced by hybrid engines, he says.

But until then, car dealers say they continue to struggle getting hybrid vehicles off their floors.

"Only 10 percent of the business is interested in hybrids," Silvius estimates. "Ninety percent are still interested in traditional cars."

The Green Car Congress reports hybrids accounted for only 2.4 percent of the new vehicle market to date this year.

Jones Honda, which carries the Civic and Insight hybrids, reports that in April hybrids constituted 5 percent of its total sales.

Local numbers follow a national trend; sales of hybrid cars dropped a whopping 45.5 percent last month compared with April 2008.

The Los Angeles Times reports that hybrids account for only 2 percent of U.S. vehicle sales.

As gas prices fell from their $4 a gallon high last summer to around $2 a gallon, local dealers said there has been a correlation between fuel prices and interest in hybrid vehicles.

"As many hybrids as we could get, we could sell when gas was $4 a gallon," said Nick Rock, sales manager for New Holland Auto Group. He said the dealership was able to sell 20 to 25 hybrids a month last summer, but interest declined as fuel prices fell.

"Gas mileage is still very much on people's minds," he said.

Pent-up demand last summer led to an overflow in supply, and automakers are now eager to clear dealer lots of older hybrid models.

So much so, Toyota offered a $1,000 cash rebate on the 2009 Prius that lasts until the end of this month.

Other automakers are following suit.

In March, Honda offered $2,000 in cash, financing and leasing incentives to buyers of the Civic hybrid.

Earlier this year, President Barack Obama called on U.S. automakers to "thrive by building the cars of tomorrow," suggesting that new regulations could push the average fuel economy above 40 miles per gallon by 2020.

Still, some dealerships aren't jumping on the hybrids bandwagon, partly because of low demand, but also because there's not a whole lot of hybrid models to go around.

Despite pressure from Washington, Ford expects to produce only about 20,000 new Fusion and Milan hybrids this year, or about 1 percent of its total production, the Los Angeles Times reports.

"We have no hybrid models," wrote Bill Durkota, of Brubaker Chrysler-Jeep, in an e-mail. "There were a few Chrysler Aspen hybrids built late in 2008, but we didn't receive any."

Many local dealerships, such as Providence Chrysler Dodge Jeep near Buck and John Sauder Chevrolet in New Holland, don't carry any hybrids.

The immediate prospects of hybrids taking a majority share in the market are slim, but newer hybrid models may pique interest this summer, dealers say, largely because of new gadgets and improved gas mileage.

"Nontraditional hybrid buyers might have more interest now," Silvius said.

Climbing fuel prices won't hurt, either.

"If gas prices go up, I definitely see our sales going up," Rowe said.

Starting at $27,270, the 2010 Ford Fusion can cover about 1,445 miles on a single tank of fuel.

Even better for hybrid enthusiasts, federal tax credits, coupled with dealers eager to unload piling inventory with cash incentives and rebates, make buying a hybrid car a deal.

Hybrids purchased or placed into service after Dec. 31, 2005, may be eligible for a federal income tax credit of up to $3,400, according to the government Web site, http://www.fueleconomy.gov.

But so long as gas prices hover around $2 a gallon, dealers say hybrid sales will continue to represent a minority of their business.

"It's just the way it goes," Rowe said.



Paul Franz is a Sunday News staff writer. Contact him at pfranz@lnpnews.com or at 295-5063.
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