Toyota Motor's Prius hybrid, the most fuel-efficient car sold in the US, is getting harder to find on dealer lots and commanding higher prices when customers do manage to get one.
It is no surprise that with galloping fuel costs, automakers are continually reporting declining sales. Nowhere is this effect more profound than in the US, the biggest car market in the world, whose privileged inhabitants had enjoyed the benefits of cheap fuel for decades to become extravagant energy consumers.
However, with changing times a larger number of Americans are turning in their fuel-guzzling SUVs for more efficient alternatives. And it's this change in perspective that has catapulted a Japanese car company to the top position in the country in terms of sales.
Yes, we are talking of Toyota, a company that has enjoyed enormous success over the last decade and rewrote the rules of fuel efficiency with its groundbreaking Prius. However, even Toyota hasn't been able to shake off the debilitating effects of the ongoing financial crisis.
Its US sales, down 3.3 per cent this year through April, are heading for the first annual decrease since 1995. This has resulted in a 28 per cent drop in profit last week for the quarter ended 31st March. Moreover, things don't look too rosy on the near future either, with Toyota president Katsuaki Watanabe predicting a 6.4 per cent decline in North American sales for the year ending next March.
Amongst all this gloom, there is one bright spot – the Toyota Prius. Overall vehicle sales may have declined, but Prius deliveries are up 23 per cent in 2008, to 64,664 vehicles. Already the world's best-selling hybrid, the Prius was No. 8 in US passenger-car sales through April, it's highest ranking.
In fact, so much is the demand, that people are finding it hard to get one. And Toyota as well as the government has done away with several incentives that encouraged people to opt for the fuel-efficient Prius. Corporate incentives that were eliminated include low- interest rate financing, discounts on accessories, and above book-value offers for customer trade-in vehicles.
Two years back, Prius customers could avail of US income tax credits of as much as $3,150 for purchases. California buyers also were able to use the cars for unrestricted access to carpool lanes. Neither incentive is available now.
Toyota cut the value of sales promotions on the five-year- old model to $123 per vehicle in April, from $1,471 in March 2007. Even then, sales jumped 67 per cent last month, fuelled by oil consistently above $100 a barrel.
As of today, it can take up to two weeks to receive delivery of the hybrid-electric vehicle, said Mark Harding, general manager of Toyota of Santa Monica, in Santa Monica, California. ''We've got some in stock at the moment, but we've also got a waiting list,'' he said. ''Supply is very tight.''
John Hanson, a Toyota spokesman in Torrance, California, confirmed that American customers can get a Prius today, but ''next month or the month after that, it's tough to say.'' Current inventory stands at eight days, including dealer stock and cars in transit across the US. This is quite a contrast from the peak supply of 59 days in January 2007 when Toyota announced its first round of Prius incentives. Analysts consider a 60-day inventory as the industry standard.
Perhaps because of the demand, Toyota said on 2nd May that it planned to boost the base price of the Prius by $400, or 1.8 per cent, this month. Currently, Prius sells for $25,274 on average, $869 more than a year ago.
The car returns an average of 46 miles per gallon in combined city and highway driving, the best fuel economy of any model rated by the US Environmental Protection Agency. This translates to a fuel economy of almost 20 kmpl. No wonder the Americans are clamoring for the Toyota Prius.
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