Sales of hybrid cars suffer in recession

Even as automakers work feverishly to develop new hybrid cars, cash-strapped consumers are closing their wallets to today's models.

Fuel-thrifty gas-electric hybrids sold poorly in January amid low gas prices and the recession. Sales of hybrid versions of the Honda Civic, Ford Escape and Toyota Camry all took bigger percentage dives in the month than sales of the conventional versions. The hybrids come with higher price tags, though the gas savings can offset the upfront cost over time.

Sales of the leading hybrid, Toyota's Prius, which has no gasoline equivalent, fell 28.6% last month vs. January last year, Autodata says. That was less than Toyota's 31.7% overall drop but a far cry from last summer when dealers had waiting lists for Prius.

It's a "very bad car market, but Prius is not immune," says Toyota spokesman Mike Michels. "Gas prices have abated to a point that people have a fairly short memory." Regular gas averaged $1.91 a gallon nationwide Thursday vs. $2.98 a year ago, AAA says.

The drop in hybrid popularity comes at a touchy time. Automakers are ready to roll out more new hybrids in spring: Honda Insight, Ford Fusion hybrid and a next-generation Prius. Slow hybrid demand near Insight's launch "is not a big deal," insists Honda spokesman Kurt Antonius. "The Insight is perfectly positioned" as a value-priced vehicle.

"We want to sell it for below $20,000" in the U.S., said Koichi Kondo, Honda executive vice president, at the Insight launch Thursday in Tokyo. It goes on sale in Japan today at 1.89 million yen (about $21,020) to start.

Automakers are starting to discount hybrids. Total average incentives on them rose 88% from December through January to $992. In the same months, incentives on conventional vehicles fell 6% to $2,736, reports Edmunds.com. Hybrid incentives in the past year, though, remain below their peak two years ago.

Sales will bounce back when the economy improves and gas prices rise again, predicts Paul Scott, co-founder of Plug In America, which advocates for plug-in electric vehicles.

"Most people understand it's only a matter of time before (gas) goes back up," he says. "Once they feel more comfortable about buying again, they will buy hybrids."

Contributing: Reuters in Tokyo

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