Tuesday, April 05, 2011

1Q Hybrid and Electric Car Sales Jump 37% on High Gas Prices

Selling the Volt
Selling the Volt at the Auto Show, 2009

Nothing like those rising gas prices to get people thinking about fuel efficient cars. Again.

U.S. sales of hybrid and electric cars rose nearly twice as fast in the first three months of 2011 as the market, according to research firm Edmunds.com.

Bolstered by rising gas prices, gas-electric hybrid and electric car sales increased 37 percent in the first quarter to 78,523 vehicles, Edmunds said.

Toyota Motor Corp. accounted for more than two-thirds of the total, but the biggest sales gains were recorded by Honda Motor Co., Germany's BMW AG and General Motors Co., which rolled out the Chevrolet Volt extended-range electric car late last year.

Toyota led in a big way with over 54,000 vehicles sold; Pruis sales jumped 50%. Honda was second, recording an 84% increase to 11,354 sold, and Ford came in third with a 9% increase and 7,704 in sales.

Keep in mind - most of this came before this latest gas hike. Consumers starting flocking to smaller cars in general in March according to Autodata and others, and now Toyota is in a bit of a bind on supply because of the earthquake. Where will consumers turn next?

Still, the supply of Japanese automakers' products -- which made up half of AutoNation's sales last year -- should decline starting in May, sending prices higher for fuel-efficient vehicles. With popular Japanese small cars in short supply, consumers will likely take two paths, AutoNation spokesman Marc Cannon said.

"The domestics will have an opportunity to pick up market share," he said. "But many customers of the imports will postpone their purchases if necessary until the inventories come back."

Japanese brands' inventories should slip until this fall, to between 20% and 50% less than levels expected before the quake, AutoNation said. Tighter inventories come just as gas prices are approaching $4, a price expected to send consumers to smaller vehicles.

That's great for automakers trying to prove Detroit can make money on small cars, although when companies reported March sales last week, Detroit executives refused to point to the quake as an opportunity to gain share.

No one wants to look like a heel, but we will take the business. Apparently they couldn't boost production fast enough last month on the Ford Fiesta, or they would have sold more than they did. And GM's Cruze production was slowed by a fire at a parts supplier, but they expect those sales to bounce back - especially in light of the latest gas spike.

Hybrids, electrics, small cars, all doing very well. I could probably dig up some quote from some naysayer (Nolan? is that you?) that predicted Detroit couldn't sell small cars, but I would rather just cut straight to the Elliot Reid "I Told You So" dance instead.

Bet GM wishes they could crank out tens of thousands of Volts in the next week at this point...