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Texas Sales of Hybrid Enter Fast Lane May 2005Brent Miller, 45, considers himself an SUV kind of guy.Its a Texas car; its a macho thing, said Miller of League City. I was comfortable driving a Suburban. Until gas prices shot past $2 a gallon and wouldnt budge, that is. Miller works at Dow Chemical in Freeport. His wife, Julie Escalante, 44, is a municipal judge in Baytown. From commuting alone, the couple each week racks up about 1,000 miles. With five kids, ages 8 to 17, the family spends about $250 a week on gasoline. Last month, Miller, after a three-week wait, forsook his cherished 2003 Suburban, which gets about 12 miles to the gallon, for a 2005 Honda Civic gasoline-electric hybrid, which gets about 46 miles a gallon and has a base price of about $19,900. The hybrids feature gas engines and electric motors that work in tandem to provide good power with far less fuel consumption. Technology allows the hybrids to charge their own batteries while they operate, so they never have to be connected to a power supply. As analysts warn that high oil and gas prices are here to stay, a convoy of consumers is choosing the gas sippers over gulpers, and car dealers from Galveston to League City say they cant keep them on their lots. +++ Toyotas Star Marvis Carmichael, fleet manager at Star Toyota in League City, said some of his customers have been on a yearlong waiting list for the 2005 Prius, a superstar among the hybrids. Toyota introduced the Prius in Japan in 1997 and began selling it in the United States in 2000. The company is struggling to keep up with demand. Ever since theyve come out, there hasnt been enough stock of them anywhere, Carmichael said. Does Carmichael see a slowdown in hybrid sales? Not with fuel over $2 gallon, he said. Theres going to be all kinds of different things manufacturers are looking to do to lessen our dependency on oil. U.S. automakers are racing to catch up. Toyota holds more than 60 percent of the hybrid market with Honda a solid second at 31 percent, according to J.D. Power-LMC Automotive Forecasting Services. Chevrolet, which has hybridized some pickup trucks, is expected to be the largest domestic brand in the hybrid category, growing its market share by 15 percent by the end of the decade, according to J.D. Power, which predicts 38 hybrid vehicle models to be available by 2011. +++ High Prices Here To Stay? Last month, as Detroit lamented softening sales, Toyotas U.S. division said its Prius mid-sized sedan recorded its best-ever sales month with 10,236 units, an increase of 160.9 percent compared with the same period the year before. The Prius, with a manufacturers suggested retail price of $20,975, gets a combined city-highway average of about 55 miles a gallon. In Texas, the current average gas price is $2.135 a gallon, 45.3 cents higher than last years average of $1.682 a gallon. Last week, consumers in the Galveston-Texas City region were paying an average of $2.112 a gallon for gasoline, down 6 cents from the week before. Meanwhile, the summer driving season always brings with it higher prices. Motorists can expect the statewide gasoline average to remain above $2 a gallon for the next several weeks, said Rose Rougeau, spokeswoman for American Automobile Association. Whether prices will increase to new record levels near Memorial Day, remain about where they are now or fall below $2 a gallon is uncertain due to the volatile price of oil. +++ $100 A Barrel? As a rule of thumb, every $1 increase in a barrel of oil means a 2.4-cent increase in the price of a gallon of gasoline. Strong demand, political unrest in oil-producing regions and fear of supply disruptions all affect prices, which have nearly doubled in the past two years. Opinions among analysts on where oil prices are going differ wildly. The venerable investment firm Goldman Sachs suggested last month that prices might exceed $100 a barrel, according to the Financial Times. Some analysts scoffed at the suggestion, but other market observers joined the chorus predicting oil would double in the next five years to average near $77 a barrel and hit $100 a barrel by 2010. Crude oil prices closed this week below $50 a barrel. +++ Over A Barrel In his April report, Texas economist M. Ray Perryman said higher energy prices driven by demand were here to stay. While the average price of gas in Texas has just topped $2, demand was about 2 percent above the same period last year, when costs were substantially lower, Perryman said. The bottom line is that our nation consumes about 20 million barrels of oil a day and is heavily dependent on imported oil, Perryman said in his report. Even if we completely drained the countrys strategic petroleum reserves and refused to import any oil, in less than two months we would have to rely on foreign sources again. World oil demand, bolstered especially by Chinas strong economy, also is guzzling supplies, say economists. +++ Staying Power? Ryan Orewiler, general sales manager at Sand Dollar Autoplex in Galveston, said that when gas prices hit $2 the dealer began noticing changes in shopping patterns. Sales of SUVs have gotten a little soft, but that market was so crazy hot it had to soften up; the market got saturated, Orewiler said. He isnt counting SUVs out, but said he expected a surge of sales of smaller SUVs and sporty station wagons. Earlier this year, J.D. Power predicted that despite rapid growth in hybrid-electric vehicle sales, their market share likely would top out at 3 percent of the U.S. market by 2010. Nearly 88,000 hybrid-electric vehicles were sold in the United States last year, comprising 0.52 percent of the total U.S. light-vehicle market, according to J.D. Power. +++ Sales Slow-down Sales next year are expected to climb to more than 260,000 units, to 1.53 percent, according to the firm, which attributes an eventual plateau to cost. This is related primarily to the price premium of $3,000 to $4,000 that consumers must pay for a hybrid vehicle, compared with a comparable non-hybrid option, and to competing technologies such as more fuel-efficient gasoline and diesel options that will be available after 2006, according to the report. Still, consumers such as Miller say theyre pleased to be able to write $2,000 off their income taxes for buying hybrids, which produce fewer tailpipe emissions, thus causing less air pollution. Nassau Bay resident Corbett Ray is a financial planner, but it was the environment as much as fuel costs that inspired him to buy a Prius in 2000. Ray, 53, was on a yearlong waiting list before picking up his 2005 Prius at Star Toyota last month. +++ Good To Be Green Gasoline-electric systems emit as much as half the carbon monoxide than traditional internal-combustion engines, which is important to Ray. Im an evangelist for hybrid cars, Ray said. This is an easy solution for a lot of the countrys problems. If everyone drove a hybrid, even if its a big hybrid Hummer, it would save a third of the fuel consumption and lessen dependence on foreign oil and pollution, two issues that are important to me. League Citys Miller, who has one teenager driving and another about to, said he was looking at the bottom line when he purchased his Honda Civic hybrid. Its not a right now decision; its something thats really going to help us in the long term, he said. But if I hit the lottery and didnt have to worry about finances, Id have a pickup truck or Suburban. Im a typical Texan. SOURCE: Galveston County Daily News | ||
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