One of the problems is that gas prices have been
relatively low. Across much of the U.S., gas has fallen to
$2.50 a gallon or less, down from highs of $3 or even $4 per gallon
of a year or two ago. At the same time, the rich aren't quite
as rich as they once were -- due to the recession -- and luxury
vehicle sales across the board have dropped accordingly.
combination has created a perfect storm for the luxury hybrid
industry. While some Toyota dealers may be "adjusting"
Prius prices past their MSRP, Toyota's own Lexus brand is making
cuts to try to sell its hybrid models. The Lexus LS 600h L, a
high end luxury sedan which starts at $106,035 -- making it the most
expensive hybrid on the market -- has received a whopping $10,000
incentive. And Toyota is giving $1,000 to sales associates who
can sell one of the beasts, as an extra incentive to try to move them
off the lot.
Through September, sales of the entire LS lineup
were down 53 percent, though Toyota did not specify exact sales
numbers for the hybrid variant. A $3,000 discount and $1,000
sales associate bonus have also been issued on the 2009 Lexus GS 450h
midsize sedan. Starting at $56,550 the GS isn't as costly, but
its sales have still been hurt significantly by the collapse of the
Another brand that has been taking a lot of
damage is GM's Cadillac brand. Traditionally a strong seller,
the Cadillac Escalade SUV has seen its sales drop of 44 percent.
The 2009 hybrid Escalade, which starts at $73,135 has seen five
figure discounts offered from some retailers, surpassing even
Toyota's aggressive luxury brand discounting. The hybrid had
previously looked to be a promising seller, thanks to GM's hot
GM's Chevrolet and GMC hybrid variants of the full-size SUV
platform have also been hurting. While these vehicles are not
targeted at the luxury market, they come with relatively high prices,
approaching the cost of a luxury sedan. GM has also been
aggressively discounting these models.
Currently, according to
Edmunds.com, luxury vehicles carry an average discount of $6,551 per
vehicle. This is second only to premium sports cars.