Hybrid Demand Up, May Sales Down

According to a report in the Detroit Free Press, May auto sales figures will show a buying shift from conventional to hybrid vehicles. For most automakers, May sales will be lower than previous months, and point to a decade-low in new car sales, with a drop in year-to-year sales volume of 7.5%.

With average gas prices hovering near $4 per gallon, hybrid vehicles are more attractive to cost-conscious consumers, who are looking for a reason to justify spendig more for a vehicle. According to Edmunds, the Toyota Camry hybrid provides the best value and shortest pay-off period. With current average gas prices, the added cost of the Camry hybrid can be recovered in just 1.6 years. The Chevy Malibu hybrid ranks second, with a break-even point of 2.7 years.

JD Powers and Associates reports that sales of the Toyota Prius, although up nearly 25 percent for the year, were down 2 percent in the midwest. This does not indicate that demand is down, but rather that the supply of available Prius vehicles is being distributed according to demand. Sales of the Prius have typically lagged in the midwest, so fewer Priuses are distributed to midwestern dealers.

According to the Japanese newspaper Tokyo Shimbun, Toyota is in talks with GM to produce the Prius in the United States at a California factory jointly operated by Toyota and GM. Toyota has confirmed the discussions but emphasizes that no decisions have been made.

Sources:
Detroit Free Press
Charleston Daily Mail