Small car, hybrid sales taking a long drive off a short pier

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Cheaper labor and lower overall production costs are driving production outside the U.S.

Cheaper labor and lower overall production costs are driving production outside the U.S.

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The short-sightedness of the car-buying public is breathtaking. It was just months ago that fears over $4 gas prices had people scurrying about, dumping loaded SUVs for a fraction of their purchase price and replacing them with smaller, more efficient vehicles. But today, with fuel well under $2 per gallon in most places, Americans are returning to their big-car ways.

Hybrids have taken it on the chin as well, even leading small cars back into oblivion. Sales of the Toyota Prius are off 30.8% in February when compared to 2007 figures, and hybrids were down 10% across the industry throughout 2008, despite record demand in the summer, reports The Detroit News. The cost of buying the technology makes owning one only marginally cheaper than owning a larger, less efficient car - and even then only when fuel prices are high.

With stricter CAFE regulations looming in the background and a weak economy in the fore, carmakers are not precisely happy with the reversal of tastes among those that are still buying cars either.

The backlog in small cars like Toyota's Yaris, which has a 175-day supply in the U.S., and the Dodge Caliber, with 205 days worth of inventory on hand, threatens to put the assembly lines on hold indefinitely. Chevrolet's Aveo (pictured) is even worse off, with 427 days of overstock - enough to sell until May 24, 2010 even if the factory stopped making them today, reports The Wall Street Journal.

So what happens when the carmakers readjust yet again to this fluctuation in consumer preference only to have the price of fuel skyrocket along with demand for small cars and hybrids? Can the industry withstand another such setback?

There are those among the major auto companies that think fuel prices were only the catalyst in the reaction, and that other forces, including political and moral influences, will keep the ball rolling toward a smaller, more efficient American fleet. With the government backing the industry's play, President Obama's call for 1 million plug-in electrics by 2015 and a popular culture that tends toward demonization of what is perceived as anti-environmental action, they may be right.

On the other side of the issue, there are people like Kelley Blue Book's Jack Nerad, who told the Pittsburgh Post-Gazette, "I think what you hear out of the government these days is almost antithetical to what you hear in the marketplace, at least in the short term."

So will the short-term dissonance in consumer demand and government-mandated supply resolve in favor of the carmakers? Or will the consumers continue to snatch up SUVs, pickup trucks and larger sedans until they are forced to once again dump them on the used market only to seek hybrids and smaller cars - perhaps to find them unavailable? Only time will tell, but it's a game being played with millions of jobs in the balance.
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Comments (6)
  1. While I don't think hybrids are the end-all solution, I do agree that people have incredible short-sightedness when it comes to fuel price volatility.
    I have two V8 vehicles, but no commute. If I did have to drive more, I would buy a more efficient machine, even as fuel prices have dropped.

  2. Why is anyone suprised by this, human have always been short sighted

  3. Its a well known fact that I've been bashing Hybrids and Electrics pretty hard and my opinion is still the same. They just do not work or fit into our lives the way the current car does. We humans want a car that moves our whole lives forward and not portions of it forward and other parts of our lives backwards!!!

    Checkout the following link and you'll see what I mean

  4. MWOW:

    i think the problem with your view about hybrids and electrics is valid for the current products and this is the reason why i hate the prius and other similar cars: they're rubbish cars to drive. brilliant on paper, but absolutely not designed with the "driver" in mind. and yes, they get 40-50 mpg instead of the advertised 70mpg but how many people are getting the rated mileage out of their vehicles? I drive a 2008 focus, with the 5 speed manual. its supposed to get 35+ mpg but i average about 42. why? im a lead foot so dont think that im babying the car. its because i drive 40miles every day on the same road with a 30mph speed limit and about 10 stops. the cruise is always on at just over 30mph and every time i accelerate, the car is in 2nd gear and the accelerator is on the floor.

    if you drive like that, on that same route, with a prius, you'll get worse mileage. i can guarantee it cause ive done it.

    hybrids are also crap on the highway. today's hybrids. tomorrows hybrids will have more purposefully designed motors.

    hybrids excel in city driving. if you do nothing but slow speed stop and go driving, then a prius will give you 50+mpg. and in a city you arent cornering fast or anything crazy like that.. so the drive is just about comfort and economy.

    trust me, i know the complaints of hybrids and todays products arent even scratching the surface as far as the technology.

    basically, if the world had nothing but the chrysler K car and the pontiac sunfire, you'd think "these car thingers are completely horrible". bottom line.

    also i personally feel that toyota plays with the consumers mind. they design boring cars and they sell well, because people think "well if that car is selling and its that boring then it must have something goo about it that i just dont understand" (quality) and they buy it. the prius is ugly, drives like crap, the interior on my ford is better, and the ride is comparable to a 30 year old mattress. but people want them cause they clearly have to be desirable based on something that you cant see.

    who buys priuses? the same people who bought large SUVs. they have their rich exuberant vehicle, and they have their prius to offset it. its a form of self inflicted poverty. its been labeled as green, people think of it as green, it drives like crap, its all around a horrible car, and people love torturing themselves by driving them around.

    when you see a homeless person, you'll be less inclined to buy some expensive clothing, you'll eat less on your next meal. its not helping out those homeless people but you feel better about yourself afterwards.

    thats what the prius is.

    but dont lump "hybrid" and "electric" vehicles into this whole market. sure the tesla roadster doesnt corner like the elise, but its faster.. and it sure as hell will outperform almost every other car around. its a good product.

    Just because you've never had a good hot dog before doesnt mean that there arent excellent hot dogs out there. and even if there arent any good hot dogs out there.. they could still be made well.

    [end rant]

    but yes,.. consumers are extremely short sighted. especially those of us in the west.

  5. Chris what I'm getting at with electrics is that if you cant give me 300 miles of range in less than three to four minutes the product is just never going to sell!!! Next time you fill you car with gas time it then call a Tesla dealer and ask him/her when my Tesla runs out of juice how long does it take to charge it? Until the answer is three minutes approx. for 300 miles of travel the whole concept of rushing out and supplying the world with electric cars is a complete and utter pipe dream...

  6. is range that big of a concern for people? i mean actually?

    case in point: i live 20 miles from school, work, what ever. i rarely take trips outside of that. strictly speaking, 99% of my travel can be done with a 40 mile range. but now we're talking purely electric. if we look at something like the Volt, an electric car with 40 miles range plus a generator to give you another 3 or 400 miles in range, what is the complaint? I'm hoping it has good drive dynamics and is a relatively enjoyable car compared to the prius.. but the point stands.

    if you want a city runabout, you have EVs. if you want something with more than a typical day's worth of commuting power, the hybrid cars of tomorrow will suffice.

    just dont discount the whole idea in a blanket statement based on today's crappy products. if you got behind the wheel of a model T you'd probably wonder how the hell we even got to where we are today.

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