The Secret to Hybrid Car Sales ~ Hybrid Car Review
Hybrid Car Review: The Secret to Hybrid Car Sales

Wednesday, December 05, 2007

The Secret to Hybrid Car Sales

Question MarkWhen it comes to buying a hybrid, there seems to be two main steps for most people. Step one, decide you want to buy a hybrid. Step two, figure out which hybrid you want to buy.

Hybrids have become more and more popular each day, especially as gas prices continue to rise. But not any and all hybrids, and that seems to confuse some people. Just slapping a hybrid badge onto a car won't sell it. Mild hybrids have not been all that successful (aka, the Saturn Aura or Vue). Nor do full hybrids take a pass. Just because you can move the vehicle on electric power, that doesn't mean you're going to sell a lot of them (aka the Honda Accord or Insight).

There are too many choices already on the market for the 'it's a hybrid, therefore it must be good' to work anymore. All you have to do is look at the Accord sales numbers to figure that one out.

Why the Honda Accord Hybrid Failed
The Honda Accord Hybrid started selling in December of 2004. It started off strong, with over 1,000 sold in the first month and quickly jumped up to it's peak point in September of 2005, selling over 2,000 units. In December of 2004, the Accord Hybrid was only the fifth hybrid to hit the market (Prius, Civic, Insight, and Escape/Mariner came before). By October of 2005, the Highlander Hybrid and RX 400h had been added in to the mix with the Camry Hybrid coming in April of 2006. With more options available, sales dropped steeply, never going above 1,000 after October of 2005. Honda recently announced they would stop selling the Accord Hybrid.

But why did it fail? Quite simply, more choices for those who wanted a hybrid car and the fuel economy improvement wasn't there. The manual 2007 Honda Accord is rated at 26 mpg / 34 mpg, while the hybrid gets 28 mpg / 35 mpg. When the price differene (MSRP of $18,625 (base) to $31,090 for the hybrid) for the two versions gets factored in, it's quite easy to see why people aren't choosing the hybrid version.

As an aside, it also makes me wonder quite seriously about how well the Chevy Malibu Hybrid will do once it arrives. An improvement of 2 mpg is almost cosmetic. Even though, by all anecdotal reports so far, the new Malibu is selling well (and I really like the look of it), my guess is the Malibu Hybrid will do just as well as the Accord Hybrid.

Comparison Shopping is Easy
Comparison shopping is easy to do. With over 10 hybrids out there, consumers are showing their preference. And despite it's limitations, the Prius is clearly the favorite. And it's not hard to see why that is. The Prius is:

  • just large enough to be useful (i.e. it's not a two-seater like the Insight, retired by Honda last year),
  • it's not an SUV (which can be a hard sell to the 'greener' consumers who are looking to make a 'difference' when they buy their car),
  • it gets the best fuel economy at 48 mpg / 45 mpg (now that the Insight is gone) and
  • the price isn't outrageous (2008 base model is set at $21,100).
Add it all up and you have a clear choice for most people when they start looking at hybrids.

The second most popular hybrid on the road today is the Camry Hybrid. Consumers sacrifice fuel efficiency (33 mpg/ 34 mpg) for more room for a little more money ($25,000). The Civic Hybrid doesn't fare as well, despite it's better fuel economy. The Civic Hybrid is just a couple of inches longer and wider than the Prius, but it's also a couple of inches shorter. But since it is slightly more expensive than the Prius and is rated just below the Prius in fuel economy at 40 mpg / 45 mpg, it fails the comparison test.

And then there's the Ford Escape/Mariner. It's the most fuel efficient SUV with only a slight price premium, which is almost negated by the federal tax credit (if you qualify). It's also a 'domestic' option, for those consumers who want to buy from home.

Is it Really a Secret?
Put it all together and it's clear why the Prius, Camry and Escape are the winners so far in the hybrid marketplace. Maybe it's just not that big a secret after all.

Get Four Free Price Quotes From Yahoo! Autos Hybrid Research and Pricing at

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