Hybrid Car Sales in the coming months ~ Hybrid Car Review
Hybrid Car Review: Hybrid Car Sales in the coming months

Tuesday, September 26, 2006

Hybrid Car Sales in the coming months

According to the latest JD Powers survey, poor gas mileage is now the third most-cited reason for rejecting a vehicle. The first and second reasons cited were "total price too high" and "total monthly payment too high," respectively.

There are three major things happening at the end of September that may affect hybrid car sales in the coming months. First, the price of gas is dropping (albeit slowly) with the end of the summer driving season. Second, Toyota is about to lose half of its federal tax rebate, which may affect sales of the most popular hybrid vehicles, the Prius and Camry hybrid. And third, the winter season is settling in, a relatively slower time for buying cars.

2005 hybrid car sales, in the month of September, saw a big drop in hybrid sales, from over 23 thousand down to 19 thousand units sold. I would expect a drop to occur again this year based on seasonal differences (BTW, that's why car sales are measured year-to-year, not month to month), but I'm also forced to wonder about any differences in the expected drop. Will the drop be sharper based on the three reasons I listed above? Or perhaps, consumers will be more pessimistic about the recent price drops, leading them to look into the long term gas mileage savings?

Which brings us back to the latest JD Powers survey. The survey was taken after the recent price drops in gas prices. So, it looks like people are still looking for better fuel economy when shopping for new cars. So, I'm not looking for an extra drop in sales for that reason. Also, the Prius and Camry are backed by the Toyota reputation for quality, so I doubt the loss of tax credit incentives will force a big shift in sales away from them. And, even if shoppers do, they will probably just look into other hybrid vehicles.

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