Japan's Hybrid Dilemma
Toyota plans to roughly double its global production of hybrid vehicles to 1 million units in 2011. On the surface, this plan doesn’t sound too ambitious. Hybrids are flying off dealer’s lots in Japan. About 350,000 hybrids were sold in Japan last year, accounting for 11.9 percent of total sales. Toyota’s Prius took the lion’s share with 209,000 units sold. Honda’s Insight made up for another 94,000 units. Less that 50,000 were “others.”
And herein lies problem number one for Japanese hybrids:
“To develop the uptrend into a bona fide boom at home and abroad this year, Japanese carmakers must find a way to expand sales beyond a mere two offerings,” writes the Nikkei [sub].
Last year, the Japanese government offered tax breaks and subsidies for purchases of less-polluting cars. Toyota and Honda timed their releases of the Prius and Insight models to coincide with these measures, causing a run on their showrooms.
The stimulus will not last forever. The current program will most likely be extended until September of this year. Beyond? Unlikely.
Abroad, hybrids are all green talk, but little action. Sales in China and the USA are disappointing. In Europe, hybrids have yet to gain traction: The Prius accounted for 7 percent of Toyota’s European sales.
Other Japanese manufacturers are not helping. Honda is scheduled to unveil only the hybrid CR-Z sports car and the hybrid version of its Fit subcompact this year. Says the Nikkei: “It will not be able to sell a large number of CR-Zs because sports cars are a niche product, and the Fit will not hit the market until the second half, limiting its full-year sales potential.”
Nissan will roll out a hybrid version of its Fuga luxury sedan this fall, its first hybrid model for the Japanese market. No huge volume sales are expected from the high-end model.
So for 2010, it looks as if hybrids will remain mainly a Japanese affair, and that Prius and Insight will do the heavy lifting. Once the Japanese subsidies end, all bets are off. Suddenly, the 1 million Prii (Priores?) do sound a bit ambitious.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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I think ash78 is onto something re: hybrid sales in Europe. It would, I suspect, be more difficult to make a case for a more complex, more expensive technology in a market where buyers already have so many relatively inexpensive, relatively high mileage choices. Also, different markets in Japan vs. Europe vs. the U.S. represent very different driving environments. Hybrids do best in dense urban environments which is one reason that Japan is the biggest hybrid market while buyers in Europe and the U.S. are less enthusiastic. For Toyota to expand global sales of hybrids to 1 million units by next year would be very ambitious. Also, and I know this is a bit off-point, it's a bit of a stretch to refer to the CR-Z as a sports car.
How come I can't see any pics accompanying the posts? All I see are X's and the title pic...