The Toyota Prius Tips In at the Tipping Point

Robert Farago
by Robert Farago
the toyota prius tips in at the tipping point

The Toyota Prius hybrid has been the high-mileage low-emissions darling of the chattering classes and their Hollywood pals for some time. Now, suddenly, sales have shot up, and it seems that the Prius is about to become a mainstream motor. While the little eco-warrior that could still doesn't account for a significant fraction of Ford F-150 sales, the question remains: is the Prius' recent sales surge a fluke?

In May '06, Toyota's North American operations sold 8103 Prii. That summer, the hybrid sedan's sales spiked in tandem with rising gas prices. In July and August, dealers sold over 11k units per month. In September, sales dropped back down to 10,492.

For the next four months, Prius sales retreated to the eights and nines. In truth, these fluctuations were minor variations on a basic trend: the Toyota Prius had flat-lined.

In February, Toyota took action. They rolled-out a raft of special deals. New York customers could lease a Prius for as little as $219 a month. In Michigan, Ohio and Kentucky, shoppers could finance the hybrid for 3.9 percent for 36 months.

ToMoCo also gambled that the increased incentives would yield sales. They ramped up production in Japan and eliminated dealer backlog.

The afterburners were lit.

In February, the Prius beat its previous year's high water mark by 1050 units (12,227 vs. 11,177). In March sales took off. Some 19,156 Prii found new owners, up 6929 units from the previous month's total.

In April, Toyota seized the day. They launched their first national ad campaign for the Prius and offered $600 to $2k cash back on specific option packages. The result: 13,056 units. In May, the Prius finally achieved low earth orbit: 24,009 sales.

To put these numbers into context, consider the fate of the Toyota Highlander Hybrid. In both relative and absolute terms, the gas-electric soft-roader has done– and continues to do– nothing. This year's sales have yet to top the results achieved last April and May (3768 and 3755).

By the same token, last July and August, the Toyota Camry hybrid's sales peaked at 5023 (in lockstep with the Prius' fortunes). And then… niente. Although the Camry hybrid also experienced a record-setting surge in May (5144), it was nothing to write home about.

The Ford Escape hybrid peaked last April, at 3039. It's been downhill from there. January was a representative low point, accounting for just 1039 units. In May– just as the Prius hit its attention-getting 24k+ mark– Ford struggled to offload 2680 Escape Hybrids.

The Honda Civic hybrids' sales parallel the Escape hybrid's fate. The gas-electric Civic has yet to beat its April '06 peak of 3087 units. As for the the soon-to-be-discontinued Honda Accord Hybrid, the model never sold more than 783 units per month.

The easy analysis: rising gas prices and lowered sticker prices released a wave of pent-up demand for Toyota's gas-electric model. While there's more than a modicum of truth to that conclusion, it's also clear the Prius' recent success wasn't a case of a rising tide lifting all hybrid-powered boats.

In retrospect, it's obvious that the Prius' achievement is a branding-related success. When gas prices spiked, America's fuel efficiency-challenged drivers didn't want "a" hybrid; they wanted "the" hybrid. On the downside, this may mean that some of the Prius' sales gains were fashion-related.

Many of May's $20k-ish Prii may also have been purchased as a third car for a two-car family. If it's a large chunk of the total, that could bode badly for the gas-electric automobile's longer term prospects; there are only so many families wealthy enough to park a spare gas guzzler on their driveway.

That said, it's unlikely that the Prius is about to fall back into its previous sales torpor. For one thing, the model has passed a crucial price/image-related tipping point. For another, Toyota has learned a valuable lesson: even a PC "halo car" isn't immune from the market-driven price calculations affecting its other models.

In other words, anything will sell at the right price. No matter how hot the demand for the new, even more fuel efficient Prius, there's no way Toyota's going to under-produce and over-price Prius v3. Look for the sales surge to continue.

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  • Murphysamber Murphysamber on Jun 15, 2007

    I sell the Prius, and the VW TDI. And while I make a killing on both, the Prius customers are the ones who come back 3 months later complaining that the mileage is much less than what they expected. VW customers continue to plug a coupel 1000 miles a month on their cars and call to say thanks. And yes, the Prius is a best seller. That's great. So is the F150. Car's aren't necessarily best sellers because of their merits. I had a Prius to drive for a couple weeks. even babying the thing it never got close to the mileage I'm supposed to talk about. The ground isn't flat enough north of Detroit it would seem. I'm not trying to give a sales pitch for the VW diesel specifically. But I think that a hybrid gas engine is more hype and promise than anything else. You need to live in a true urban area to reap the rewards of the engine. Diesel engines last longer, and can run on a clean, renewable fuel. There has to be a reason why the Prius is so popular here. I'm a firm believer that most people will buy with their hopes, not brains. Why do you think full size trucks sell when gas is $3 a gallon. Just because something sells well doesn't mean it is the end of the discussion, or even better choice. It just means people want so bad to believe that they have found the next great thing 36 Prius' found within 100 miles of 48073. 15 Jetta diesels, and the jetta has had a diesel for 3 times as long as the prius has been out.

  • Confused1096 Confused1096 on Jun 15, 2007

    I'm not a huge fan of the Prius but I have to sing it's praises anyway. Unproven tech and all it is one durable little windup car. We use these (and various others) for company cars. Our Prii get abused just about as bad as you can imagine and they still spend less time in the shop than our Ford Foci. Impressive.

  • Kosmo Short bed? That's it?! Ranger becomes the only option if you want an actual truck bed?!
  • Probert There's something wrong with that chart. The 9 month numbers for Tesla, in the chart, are closer to Tesla's Q3 numbers. They delivered 343,830 cars in q3 and YoY it is a 40% increase. They sold 363,830 but deliveries were slowed at the end of the quarter - no cars in inventory. For the past 9 months the total sold is 929,910 . So very good performance considering a major shutdown for about a month in China (Covid, factory revamp). Not sure if the chart is also inaccurate for other makers.
  • ToolGuy "...overall length grew only fractionally, from 187.6” in 1994 to 198.7” in 1995."Something very wrong with that sentence. I believe you just overstated the length by 11 inches.
  • ToolGuy There is no level of markup on the Jeep Wrangler which would not be justified or would make it any less desirable [perfectly inelastic demand, i.e., 'I want one']. Source: My 21-year-old daughter.
  • ToolGuy Strong performance from Fiat.
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