Hybrid Sales Slump: No End Insight

Only days before the totally redesigned 2010 Honda “Insight” hits dealer showrooms, and yet there is no end “in sight” for several months of falling hybrid sales figures. It will be interesting to see if the first green vehicle priced under $20,000 can jumpstart the hybrid vehicle market again, especially with gas prices down about 50% from a year ago. While I fully expect early adopters will gobble up the first available Insights, I don’t believe Honda can shoulder this burdon alone.

According to J.D. Power and Associates, hybrid car sales peaked in April of 2008 with 41,235 sold. Compare that to February, 2009 where only 16,000 went out the door.

Assuming hybrid-electric vehicle purchases aren’t going to see any major improvements under our current economic conditions, then what will it take to get more people to consider them again?

Earlier this week, President Obama announced $2.4 billion in funding (including a $7,500 tax credit) to support next generation, plug-in hybrid vehicles. While that is exciting news, it’s unlikely to move any hybrids off the lots in 2009 or 2010.

In a recent article from Fast Company, a number of potential solutions (to fix the industry in general) were offered by people connected to the auto markets. Giorgio Rizzoni from Ohio State University suggested a floor on gas prices, including a flexible tax to keep the price at the pump at or above $4 per gallon. David Bieselin from Cisco believes the trick is to motivate people to buy a whole new set of vehicles (like iPhone changed cell phones) by using technology to revolutionize how we think about cars. Mike Hughes of The Martin Agency thinks the industry needs a vision, and that advertising and marketing alone won’t cut it. He adds, “Tell us why we should want your cars. If you can’t figure out what makes your product special, then it’s probably not special.”.

Dealer incentives and factory rebates on hybrids might help. Toyota is reportedly offering $1,000 cash back on the Prius, and $1,500 on the hybrid Camry in some markets. Honda may also be giving dealers $2,000 cash to work with on the Civic hybrid, according to Automotive News.

With the nation’s largest car dealer (Autonation) recently reporting over 600,000 unsold hybrid autos on their lots, something will obviously need to change, especially with several new hybrids coming out in 2009.

Mike Michels from Toyota recently asked, “Is it a good time to buy a hybrid? I would argue yes. Discounts are available, interest rates are low. When gas prices go back up (and they will) today’s hybrid buyers will feel like geniuses.”

This recent video from CNN sums it up:

Got any other suggestions we didn’t touch on here? Add your comments below…