Monday, November 12, 2007

It Isn't Easy Being A Green Automaker

Toyota was once lauded for producing the Prius, a hybrid sedan that practically owns the hybrid market segment.

Now, it's castigated because the company doesn't want to see laws tighten car mileage requirements and emissions requirements.

Toyota sold 7.05 million cars in the past year.

Here's something that the Newsweek article conveniently leaves out.

Less than 100,000 of those are the Prius hybrid.

Since the car was launched in 1997, only about 600,000 have been sold worldwide. That's 60,000 a year for 10 years.

Assuming that 100,000 were sold in the past year that Toyota sold 7.05 million, the Prius line accounts for 1.4% of the Toyota production.

Whatever hype Toyota got for touting the Prius, it was outsized to begin with, and the company knows that it was losing money (it's a loss leader). The real money was with SUVs and other vehicles where the profits were much greater. The demand for the vehicle, which was considerable at the outset, has never really matched the demand for any of the other main vehicles in the Toyota lineup, from the Corolla to the Camry or the SUVs or light trucks. The Prius is nothing more than a niche vehicle that might assuage the conscience of some of its purchasers, does not meet the needs of the rest of the public.

For thousands less than a Prius, you can get a Corolla, which gets slightly less mileage but a similar amount of room or you can get a Camry that has more power and space than the Prius.

While some folks on the fringes of the car purchasing market are choosing to buy vehicles based on the cost of fuel, most are looking to whether the vehicle fits their everyday needs - like space to haul their kids and their gear around.

The automakers should do more to improve the fuel economy of their vehicles, but they are giving the consumer what the consumer wants, and the sales bear them out.

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