Hybrid-car popularity shifts into overdrive- Sev in the NEWS

Hybrid-car popularity shifts into overdrive,San Diego UNION-TRIBUNE

Sales of fuel-stingy models in high gear

By Jennifer Davies
UNION-TRIBUNE STAFF WRITER

May 12, 2004

2004 Toyota Prius


Call it revenge of the nerds.
Gas-guzzling muscle cars are being overtaken by unassuming little hybrids.

And the Toyota Prius is leading the charge.

For the first four months of the year, sales of the Prius are up 80 percent from last year, and April sales are more than 150 percent higher than a year ago.

Prius sales have been so brisk that it's difficult to buy one. Waiting lists at San Diego County Toyota dealerships range from 60 to 330 people. Many would-be Prius owners are having to wait as long as a year.

David Featherman has been waiting since August. In the last few months, the Mission Hills resident has wavered about whether to hold out for a Prius or buy a regular car.

"The more the gas prices go up, the more I think I'll stick it out," he said.




No doubt record-high gas prices have something to do with hybrids' increasing popularity. In San Diego County, unleaded regular gas sold for an average of $2.27 per gallon Monday.
The Prius switches between battery power at low speeds and its gas engine at higher speeds to travel as much as 60 mpg, although owners say the average is more like 45 mpg. Although the Prius is powered by electricity and gasoline, it drives very much like a normal car.

Meanwhile, sales of low-mileage sport utility vehicles have dipped. In April, sales of the Hummer H2 were down 21 percent from the same month a year ago. Cadillac Escalade sales dropped by more than 17 percent, and sales of the lower-priced Ford Expedition plummeted 33 percent.

Sensing a growing opportunity, car companies such as General Motors and Ford Motor Co. are planning their own hybrid cars and trucks.

Fuel efficiency is only part of story, car industry analysts say.

The Prius, which made its U.S. debut with the 2001 model, and to a lesser extent other hybrids such as the Honda Civic Hybrid and Honda Insight are experiencing newfound popularity because they appeal to a niche of affluent, educated, technology enthusiasts whose politics are left of center.

George Peterson, president of AutoPacific, a market research firm, said if the Escalade is the car of rap stars and the H2 is the "the ultimate Billy Bob car," then the Prius is a car for a fledgling Bill Gates or Apple founder Steve Wozniak.

"Gas mileage is a small part of it," agreed Kevin Slater, sales manager at Kearny Mesa Toyota. "It's the technology of the car."

Sev MacPete, a new Prius owner, said he was drawn to the car partly because its low emissions create virtually no pollution.

MacPete, who started a local Prius owners club, said other members seem to fit the image of older, environmentally conscious consumers. Of the 21 people who came to the first Prius club meeting, 17 were past the half-century mark.

"Maybe we are all the free-speaking hippie types who are in their 50s and are going, 'What do we do now? Oh well, let's buy a Prius,' " he said.

On the younger end of the spectrum are people who buy the Prius because of its technology. Not only is the electric technology cutting-edge, but the Prius is equipped with a digital dashboard display that shows the number of miles per gallon the car gets when the battery is running the car and when the gas engine takes over.

People who are drawn to the Prius tend to have wireless technology in their homes and offices and are quick to buy the latest cell phone and computer, Peterson said.

Barrett Fabian is that kind of person. The 27-year-old information technology worker said he wanted a Prius because it was as close to a truly electric vehicle as there is. He said he looked at the Honda Civic Hybrid but decided on the Prius because it uses electric energy more readily than the Honda models.

"It's just a unique vehicle," he said.

The demographics of a Prius owner have made Featherman, 37, think twice about buying one. He wants the car because the size and price are right for him. New Priuses sell for $20,000 to $25,000.

"I'm not buying it because it's a cool techno geek car," he said, adding with a laugh that he gets dismayed because he usually sees older people driving them.

But with the Prius' appeal to environmental and techie types, it should come as no surprise that California has the most owners of hybrid cars. As of last year, California had 11,425 registered hybrid-car owners, according to R.L. Polk & Co., a market research firm. The next closest state was Virginia, with 3,376.

The hybrid buzz also has been helped by celebrities such as Tom Hanks, Cameron Diaz and Susan Sarandon, who drove Priuses to this year's Academy Awards. Toyota has been so overwhelmed by demand that it hasn't launched much of an advertising campaign.

"They have done a nice job of product placement," Peterson said. "The word of mouth has been quite powerful. Even my wife who never looks at cars says, 'Maybe, I should get a Prius.' "

Alan Rahbari, general sales manager at Cush Honda in San Diego, said sales of the Civic hybrid have been helped along by the backing of stars.

"If the stars are buying it, then people tend to want to at least look at it," he said. "In the past, it was just a car with new technology. Now it is the car to buy."

But there's a question as to how widespread the Prius demand is.

The waiting lists are more a function of lack of supply than of overwhelming demand.

"Prius plays into the values and desires of a certain group of people – that's a relatively small percentage of the population," said Dan Gorrell, of Strategic Vision, an auto industry market research firm.

Local dealers say they each get only a few Priuses a month. The lack of supply has helped reduce the average number of days a Prius stays on dealer lots nationally to six, the lowest in the industry.

"The factory wasn't ready," Slater said. "They are so far behind it'll be a while before they catch up."

In comparison, a Hummer H2 stays on the lot for an average of 60 days and a Cadillac Escalade remains on the lot an average of 49 days.

That hybrid sales are up and SUV sales are down doesn't mean that the reign of large SUVs is over. The cars appeal to widely different audiences, Peterson said.

"You can never make the connection that people leaving Hummers are buying Priuses. That ain't never happening," he said.

Or as MacPete said of the Prius: "It's the absolute polar opposite of a Hummer."

Even with rising gas prices, SUVs are still going to be the car of choice because consumers have become too accustomed to their convenience, Gorrell said. "I don't see people walking away from the performance and intangible benefits that larger SUVs provide, unless gasoline becomes very expensive," he said.

Car buyers soon may not have to decide between high-mileage hybrids and SUVs. Ford is planning to offer a hybrid version of its Escape model, a smaller SUV, later this year. A Lexus SUV hybrid is in the works as is a hybrid Highlander, one of Toyota's SUV models. (Lexus is Toyota's luxury-car line.)

Interest in the Highlander appears to be intense. Local Toyota dealers say customers are already coming in to ask about the hybrid Highlander even though Toyota hasn't announced when the 2005 model will be released.

Said Slater: "There's already 30 people on the waiting list."


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