Hybrid Sales: Singing In The Rain or Whistling In The Dark?

Each month, automakers release sales figures for both their domestic and international markets. To put it nicely, the sales figures have been …well… in the tank for over a year. Hybrid vehicle sales rose during the height of the summer, when gasoline prices averaged more than $4/gallon in the US and higher still in Europe.

In the US, gas prices fell, and with them fell sales figures for hybrid vehicles. Dealers, who had maintained waiting lists for hybrid cars, now have an ample supply on the lot. Manufacturers are now offering substantial incentives on hybrids, something previously unheard of.

Most major manufacturers reported a steep decline in the purchase of hybrid vehicles in January. Sales figures for the hybrid segment slid even lower than overall vehicle sales, prompting Chrysler to kill production at the only plant tooled to make the Aspen and Durango hybrids. Audi killed its hybrid vehicle programs altogether, and the jaw-dropping turn in sales left automakers wondering about the viability of their very expensive hybrid vehicle programs.

Having said all of that, Honda and BYD now say their hybrid sales figures in January have surged. BYD says it hybrid sales are up nearly 80% over the same time last year, and Honda says they're exceeding their sales targets for the new Insight, which went on sale in Japan at the beginning of this month.

Based on the actual units produced – 24,000 in BYD's case and 5,000 (plus an additional 5,000 pre-ordered Insights) for Honda – it's hard to conclude that the recession is over or that the auto industry is saved. BYD has only been in business since 2003, so large leaps in year-over-year sales figures are plausible. Those big sales jumps are at least curious in a country where hybrid cars sell for about twice the price of their conventional gasoline-powered cousins, and consumers have already said "No thanks!" in large numbers.

In Honda's case, the Insight is the company's designated Prius-slayer and will be priced around USD $20,000 when it hits US shores in March and Europe in April.

Right now, the future of the auto industry, let alone sales of hybrid vehicles, depends more upon the Treasury Department than it does on the manufacturers themselves. The secondary credit market has been up on blocks since last summer. If Secretary Geithner's plan (which is former Secretary Paulson's plan on a grander scale) works, then we can all feel better about hybrid sales figures. Until then, pass the salt.

Photo Credit: Sabina Šabanoviæ