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Hybrid Vehicle Demand Soaring June 2005In March 2004, a year before Toyota Motor Corp. began assembling hybrid versions of its Highlander SUV, Vince Procopio secured a choice spot on the waiting list with a $200 deposit. His order assured him the second gas-electric Highlander delivered to his auto dealer.Procopio grew tired of waiting and bought a secondhand Jaguar S-Type, but he held on to his Highlander order. Recently, he sold it for $499 on the eBay online marketplace. "What gave me the idea was salesmen who told me, you can get a premium on it. They were so much in demand," said Procopio, a Troy, Mich., salesman. advertisement The gas-electric cars may have started out as a fad six years ago, but they appear to have staying power in the market even though they cost several thousand dollars more than conventional gas-powered models. Waiting lists are so long that many customers are paying extra just to move ahead in line. Others are paying full sticker price for a used hybrid - a practice rarely seen outside the trade of Ferraris and other super sports cars. While automakers rely on cash rebates to prod sales, some car dealers are marking up the price of hybrids, or simply turning customers away. Toyota already has 12,000 U.S. orders - a six-month backlog - for the hybrid Highlander sport utility vehicle, although the model will not hit showrooms until June. The Japanese automaker has curtailed advertising for its new Lexus RX 400h hybrid to trim the order backlog. It now stands at 9,000. "At the local Lexus dealer, they said it would be at least a year to get into the Lexus RX 400h, and I should get into a 330," said Lydia Segal, a physician from Alexandria, Va. Ford Motor Co., the first automaker to produce a hybrid SUV, says customers wait two months, on average, to take home a gas-electric Escape. Six years ago, when Honda Motor Co. brought its Insight hybrid compact to the U.S. market, it attracted mostly hard-core environmentalists. But with hybrid technology now available in a wider range of vehicles, hybrids are appealing to a broader audience. "We've seen pent-up demand for exotic cars, like the Ford GT, or limited-production models, but we've never seen this type of demand for a vehicle that is somewhat mainstream," said Mike Chung, pricing and market analyst at the online auto research firm Edmunds.com. The vehicles are about twice as fuel-efficient - and less than half as polluting - as similar gas-powered models. "It's a neat car, and the gauges let you see how you're saving and using gas," says Jimm White, a financial adviser for Wachovia Securities in Southfield, Mich. He bought a Ford Escape hybrid in September. "(The) No. 1 reason I bought it was for the gas mileage. No. 2, to join my daughter, who has had two (Toyota) Priuses, and I wanted an American hybrid. And No. 3, the country's got to start saving gasoline," White said. While most hybrid buyers list fuel efficiency and low emissions as their primary reasons, demand also is fueled by factors ranging from the novelty of the technology to tax breaks and access to carpool lanes in some cities, and even political concerns. Currently, hybrids account for only 1 percent of U.S. auto sales - but that measure does not take into account potential buyers like Procopio who grew tired of waiting. So far, hybrids are proving to be reliable vehicles, according to Consumer Reports magazine, although there are hiccups. Toyota is now looking into a handful of reports that Prius engines are losing power or stalling. While waiting for more hybrids to roll into showrooms, customers are jockeying for anything available - new or used. With demand surging now for new hybrids, many dealers bid up the price. Five months after Tom French of Hermosa Beach, Calif., put down a deposit on a Highlander hybrid, he said, "we received a call from another salesman who informed us that the price would include $2,000 for market value." French canceled the order and went to another dealer. "We've been very firm with our dealers about holding the line on MSRPs (manufacturer suggested retail price)," said Toyota spokesman John Hanson. "From the customer satisfaction point of view, the wait is enough of an inconvenience without having to worry about additional dealer markups." SOURCE: AZ Central | ||
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