Consumers will tend to hold off their purchases if there is a new and significantly improved model coming soon. This is particularly true for electronics and automobiles. Word of the third generation Prius has been known as far back as 2006, and while the economic downturn played a significant role in cutting sales of the older Prius, the waiting game may have had a larger impact than previously thought.
Toyota had already decided to increase production of the Prius to 600,000 units per year in late May after seeing huge sales in Japan. The company has had to begin weekend production of the Prius in order to make a dent in demand. Increases in fuel economy and horsepower had led many to delay their purchases of the Prius until the 2010 model was available. However, many potential customers also switched to Honda's Insight hybrid, which topped the Japanese sales charts in April.
In the two months since, hybrids have continued their sales dominance, with the 2010 Toyota Prius and Honda Insight both posting strong sales. The Toyota Prius seized the top spot in May, with sales of 10,915 cars.
This month, though, it set an even more impressive mark, becoming the first hybrid in Japan's history to outsell all other vehicles. The Honda Insight's previous sales record had excluded popular mini-vehicles with engines of up to 660cc. Those mini-vehicles were easily outsold by the Prius, thanks to sales of 22,292 units.
Honda continued to do well, with its Insight Hybrid coming in fourth place. Honda's Fit, a fuel efficient traditional offering came in second place, with 13,016 vehicles sold. The sales of Toyota and Honda's hybrids were helped by relatively high worldwide gas prices, which drove Japanese consumers to take fuel economy more seriously. Japanese tax breaks have also helped convince users to switch to hybrids.
Hybrid vehicles have yet to crack the top of U.S. sales charts, but some believe it’s only a matter of time before a foreign hybrid like the Toyota Prius, or a domestic like the Ford Fusion pushes towards the top.
All of this bodes well for those hoping of a restart of Toyota's $1.3 billion Prius assembly plant currently under construction in Blue Springs, Mississippi. Toyota has already spent over $300 million on the plant. The building shell itself is finished, but the tooling and production machinery will be installed at a later date. Parts suppliers have also halted building expansion and tooling operations until Toyota commits to a restart date.
The case for a restart is particularly strong since New United Motor Manufacturing Inc. (NUMMI) appears destined for a shutdown. The joint venture between Toyota and General Motors will cease to produce the Pontiac Vibe, which is based on Toyota's Matrix. It also produces the popular Toyota Corolla and Toyota's Tacoma truck, production which could shift to Blue Springs. Production of the Toyota Yaris hybrid is also a possibility.
quote: In the U.S. the current top selling vehicles for June are the Ford F Series of trucks, with sales of 35,915 units.
quote: The problem here is the fact that in America the top selling car is a truck, which shows how seriously people are taking the whole gas issue
quote: Even said yuppie probably takes 4 buddies golfing a half dozen times a year. Try squeezing 4 of the large golf bags in a sedan.
quote: The F150 has good mileage for a truck, but in stop and go traffic like it sometimes gets over here (especially I-45 late afternoon) its still much heavier than a car so your mileage will vary greatly. Its not just solely for commuting.
quote: which shows how seriously people are taking the whole gas issue, crying a river about gas prices whilst driving a Hummer.
quote: The problem here is the fact that in America the top selling car is a truck
quote: Most people who buy them for their usfulness?
quote: NO OTHER people in the world NEED an F150, but hell americans all need them, lol.
quote: But what happens when oil goes up again? Another economic catastraphy waiting to happen?
quote: I guess we could keep sourcing coal from China
quote: I get nearly 40mpg in my car, and I am looking for one that does even better.
quote: we're spending each year on gas at $2.50 per gallon, and a large part of that is going to Venezuela and the Middle East.
quote: And as we all know, as demand goes down, prices follow.
quote: So the very people who shout USA with their God-given right to drive trucks are the very people who undermine this country by sending US currency overseas to countries that hate the USA. Well Bushy and his buddies got their money. snap No he didn't!
quote: When are you yanks going to get real? For F#$%'s sake, an F150 is a good car?
quote: If you can't see the problem, you are the problem.!! When are you yanks going to get real? For F#$%'s sake, an F150 is a good car? Most people who buy them for their usfulness?
quote: I think people should be smarter and more courteous, but we can't always get what we want.
quote: I know too many people that bought a pickup truck for no other reason than to show everyone else that their penises (or boobs) are bigger.
quote: And who's going to touch these used? $3k for the car and $5k for batteries?
quote: The specs I've seen from manufacturers are about 7 years for the battery
quote: Why? Because it is a guaranteed failure item within the warranty period that exceeds this "profit" that is being trumpeted. There is no prediction involved, it is going to happen. The specs I've seen from manufacturers are about 7 years for the battery. And hybrids will also be no better than a conventional car in regards to suspension components or transmissions. So you have all the normal maintenance with a second driveline and batteries added on top of it. And who's going to touch these used? $3k for the car and $5k for batteries?
quote: A small diesel is far less complicated and returns similar mileage. But I guess it's not "green" enough to be hip with the environmentalists. Hybrids are image cars
quote: However, Prius is very simple mechanically with about 10 moving parts including the two electric motors (without ICE). Prius has an electric transmission so there are no extra moving parts.
quote: Right, planetary gear set with two electric motors makes up the eCVT. Those are the only moving parts. Do you know how many moving parts in your car transmission?
quote: It is an electric transmission because the eCVT multiplies torque by tapping into the electric motor.
quote: planetary CVT has more parts than a standard manual or even an automatic transmission.
quote: It is NOT an electric transmission as no transmission "taps" into any motor.
quote: Toyota appears to have earned gross profits of around ¥100 billion yen (US$1 billion) on its sales of second-generation Prius hybrids last year. Toyota’s gross profit margin on the sales of the next-generation 2010 Prius are projected to be in the single digits in the first year.
quote: The gross profit earned on the Insight is still low when factoring in the large R&D costs involved in its development. However, the profit margin on its hybrid operations has risen to the level where Honda can count on it to generate the fourth-largest revenue stream behind its luxury, midsize and small car operations.
quote: So now you have the source article saying that Honda’s continued efforts at refining and improving on its hybrid design will now bring it solidly into last place as far as its automobile sales are concerned (I guess the Honda Hybrid guys can finally can stop taking heat from the lawn mower engine guys about profits at the annual picnic at least…) and you have Toyota figures that benefit from the horridly overpriced Lexus hybrids as well as old figures of the previous Prius that didn’t have to price match the new Insight, further they expect the new Prius to have single digit profit margins! Then you have a Dailytech article twisting it into saying that hybrids are a “cash cow.”…Color me unimpressed with the integrity of the Dailytech article. Now before this devolves into yet another 200 post bicker-fest about American automakers, I don’t think anyone here is about to disagree that US makers are sucking wind and that they are not doing well. This is not the argument I am making. I have issue with the horrid sensationalism that goes on around here each day. Just because one is doing bad, doesn’t mean that the other is “raking in the bucks.”I would be thrown out of a project approval meeting if I proposed a project that was only going to receive 15% ROI, much less 15% gross margins. Now the auto industry is in a much worse situation than the industry I am in, but the fact remains that 15% gross margin is not a cash cow in any industry.
quote: GREED GREED GREED.
quote: Toyota are obviously devoted to long term objectives. In case you haven't noticed , they ARE working!
quote: I'm not saying they aren't in a better position than the other big auto makers
quote: In my books ANY profit is a good profit.
quote: The DT article claiming 3100$ profit was actually full of balogna.
quote: A pair of Japanese buyers check out the new 2010 Prius hybrid vehicle, the first hybrid to outsell all other vehicles in Japan.
quote: So 50% of people need a huge truck to commute alone to work?