It’s hard to argue with success, and since making its American debut, in 1999, the Toyota Prius has been unquestionably the most successful offering in the fast-growing hybrid segment. This time, last year, the Japanese automaker could barely keep up with demand. In an industry where dealers normally keep an average 50 to 60 days worth of inventory on hand, Toyota retailers were averaging something closer to five hours.
Demand was growing so fast that the Japanese maker scrapped plans to produce its Highlander SUV at an all-new plant, in Mississippi, opting instead to build more of the distinctive, 4-door hybrids. Not a bad idea considering dealers were readily demanding – and receiving premiums that could run several thousand dollars over sticker for each Prius they could cajole out of the factory.
But something’s happened, in recent months. Prius sales, which topped 20,000, last June, have plunged to barely 6,000 a month since the beginning of the year. That new plant, down South? The mega-million-dollar project has been put on hold. Sure, the recession has a lot to do with it, and so does the plunge in fuel prices, which are now averaging less than half their mid-2008 peak. Further complicating matters: the arrival of an array of new hybrid-electric vehicles, or HEVs, ranging from the Ford Fusion to Honda’s completely-redesigned Insight, which is hitting showrooms at a rock-bottom $20,000.
Don’t expect Toyota to walk away from the Prius, as it celebrates its 10th anniversary, here in the United States. Far from it. But the Japanese maker – which has been hit unexpectedly hard by the recession – is keeping its corporate fingers crossed as it launches the third-generation Prius hybrid, which will roll into dealer showrooms this spring. (more…)