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High Gas Prices Fueling Hybrid Sales May 2005Higher prices at the gas pump are fueling demand for more fuel-efficient vehicles, most notably hybrids that use a combination of battery power and fossil fuel. According to mid-valley car dealers, when gas prices started to climb, so did the foot traffic around their car lots.Dan Lassen, owner of Lassen Chevrolet-Toyota Inc. in Albany, said the surge in gas prices has made it hard to keep a stock of the popular Toyota Prius currently the top-selling hybrid in the country on the lot. "They're flying out of here. Right now, demand definitely exceeds supply," Lassen said. He added that made it difficult for would-be customers to test-drive the vehicle, and that some people are reluctant to order a car they haven't had a chance to examine. Some customers, however, have been willing to order the car sight unseen. "As soon as gas prices went up, that's when they started getting hot," Lassen said. "In terms of numbers, the Camry is still the best-selling car, but the Prius, as far as its niche goes, is one of my most requested cars. It's been phenomenal." The appeal of hybrids is fuel efficiency. The Environmental Protection Agency puts gas mileage for the Honda Insight at 61 miles per gallon in the city and 68 mpg on the highway; the Honda Civic Hybrid at 48 mpg city, 51 highway; and the Toyota Prius at 60 city, 51 highway. The automotive magazine Motor Trend's road tests of these vehicles got different mileage figures, with 50 mpg for the Honda Insight, 40 mpg for the Honda Civic Hybrid, and the mid-40s for the Toyota Prius. Bigger hybrids with more features, such as the Ford Escape or the Honda Accord, are less fuel-efficient, with mileage in the 30s, but are still proving popular. "What people don't realize is that as hybrids get bigger and haul more people, they don't get as good a gas mileage," said Ron Thies, owner of University Honda in Corvallis. "But you still get a 20-25 percent increase in fuel economy, so they get some help there." The Nissen Ford dealership in Albany only received two Ford Escape hybrids for its lot this year, said Jerry Burger, used car manager. Both cars were traded to other dealers at their request, he said. Ford only made 4,000 hybrids to sell nationwide in 2005, and Burger said he doesn't know if Nissen will receive any next year. Adam Ceboll, sales manager at Bill Rogers Honda in Albany, said one of the main difficulties he faces is keeping enough stock on hand to address demand, particularly the Honda Civic Hybrid. "It's our fastest seller, and we sell as many as they give us. Honda doesn't allocate as many as we'd like, but some customers are willing to put them on order, and we accommodate them." Statewide, the number of hybrid cars remains small, but it has risen steadily since they were introduced in 1999. In October, according to figures from the Department of Motor Vehicles, there were 3,999 registered in Oregon. As of April 1, that number had risen to 5,253 about a third of 1 percent of the more than 1.5 million cars in the state. Part of what's spurring demand are tax incentives. Both the federal and state revenue agencies offer incentives for individuals and businesses purchasing more fuel-efficient vehicles. Individuals who buy a hybrid this year or have previously purchased one can qualify for a $2,000 federal tax credit, providing the vehicle was bought new, is of an approved list of models, and is mostly used in the U.S. The Oregon Department of Energy offers a tax incentive of up to $1,500. It's a dollar-for-dollar credit against Oregon income taxes owed, so individuals must have an Oregon income tax liability to qualify, or pass it on to an individual who does. Nationwide, hybrid car sales have generally doubled every year since 1999, when Honda debuted the Insight. In that first year, only a few hundred Insights sold. In 2004, there were 88,000 hybrid vehicles registered in the U.S. This year, automakers Toyota, Honda and Ford expect to sell a total of 210,000 hybrids in the U.S., more than twice last year's sales of 86,203. That's still a drop in the bucket, when you consider there are over 135 million cars in the U.S. But it's a category that's projected to grow significantly over the coming decade. ABI Research of Oyster Bay, N.Y., expects 5 percent to 6 percent of all cars sold in the U.S. to be hybrids by 2010. By next year, the company predicts that hybrids will account for 10 percent of the 2 million midsize vehicles sold annually in the U.S. SOURCE: Albany Democrat Herald | ||
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