By on April 1, 2008

x08ct_ta056.jpgCommentator KixStart was kind enough to listen-in on GM's conference call on our behalf. He filed this report: "During the Q&A, Jeff Green of Bloomberg News asked if they could break out hybrid sales, 'now that you have some on the market?' According to NA Marketing Maven Mark LaNeve. GM sold "577 hybrids [in March], of that amount, let's see, about 450 were the new Tahoe and Yukons; we're just starting to get some some adequate inventory out… The Malibu and Aura hybrids are just getting into the market, just had a handful of deliveries, 30 between the two of them." LaNeve said there was 'lot of interest, lot of dealers taking orders' which they hope to fulfill in the coming months. Green asked if there were any sales earlier in the quarter, (i.e. January and February)? In February… '300 above that, 843 for the quarter.' No number at all mentioned for January. Zero hybrids in January more or less fits with 577 March plus 300 for February; roughly equal to 843. Their calculators do seem to be more than a bit casual. One way or another, though, the numbers are tiny. Does it really take this long to ramp-up these things? My understanding: GM had 1200 hybrids on the way to the dealers as of the end of last month. The red ink for GM on this technology must be horrendous."

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29 Comments on “GM Hybrid Sales Suck...”


  • avatar
    jolo

    Someone, somewhere, must have access to Toyota’s Prius first year sales, both in Japan and the US, broken down by month. We’re on the net, for crying out loud, someone’s got those numbers. They were probably as bad as GM’s are right now.

  • avatar
    Robert Schwartz

    “Hybrids Are All the Rage — But Try Buying One”
    by Marty Jerome at Wired’s Autopia blog on April 01, 2008:

    … if you want to buy a hybrid version of the Ford Escape, Saturn Vue, Chevrolet Tahoe or GMC Yukon, you can expect to shell out $3,000 to $5,000 premiums that go right into dealership coffers. You can also expect to sit on a waiting list.
    * * *

    Supplies of hybrids are plentiful in some markets, wrenchingly tight in others. … A major San Francisco Bay area Chevrolet dealership we contacted had one hybrid Tahoe in stock. The gas-powered version sold for roughly $38,000. They hybrid cost a little over $52,000. …

  • avatar
    Captain Tungsten

    How about Ford and Honda? And Lexus? Seems to me that except for Prius, all hybrid sales suck.

  • avatar

    … if you want to buy a hybrid version of the Ford Escape, Saturn Vue, Chevrolet Tahoe or GMC Yukon

    That’s the problem. I am so NOT interested in a big SUV, or an SUV that barely gets better mileage with the hybrid than it does with the straight ICE (the Vue).

  • avatar

    It is certainly true that there's the Toyota Prius, and then there's everything/ nothing else. GM seems to have discovered that demand for their hybrid products reflects– and has done nothing to change– this fact.

  • avatar
    dean

    It’s been well established here and elsewhere that the economics do not currently justify the hybrid premium, especially on something like the Yukahoe hybrids.

    This leaves enviro-cred as a big driver for sales. Nobody looking for enviro cred is going to buy a 5500lb hybrid SUV, no matter how big the hybrid badging.

  • avatar
    limmin

    Toyota’s Prius is a success because the Japanese dumped it on our market (at a loss) for years, until it caught on. Toyota deserves credit for its market prescience. But they ain’t heroes.

    GM’s hybrids aren’t selling because, well, they just plain stink. The truck hybrids aren’t true hybrids at all. And the Malibu hybrid is barely more economical than the base 4cyl. GM needs a dedicated hybrid.

    However, to be fair: Honda is having trouble moving its hybrids. Honda dropped its Accord hybrid and the Civic hybrid has fallen into obscurity.

    The Lexus hybrid is doing very well. The rich buy it to brag about at cocktail parties. It’s a ‘hangar-queen,’ however (what aviators call an airplane that gets little use). They use their Range Rovers when they need milk and eggs at the Piggly Wiggly…

  • avatar
    patriotgames

    “…the Civic hybrid has fallen into obscurity.”

    Civic Hybrid sales leaped 44.3 percent to 3,769 to a new March record. – Honda’s March `08 sales press release.

  • avatar
    hwyhobo

    Hybrid sales make sense only when, well, when the hybrids make sense. The raison d’etre for the hybrid is fuel efficiency, hence the people who are interested in buying hybrids are people who want fuel-efficient vehicles. For them GM offerings are insult to their intelligence. Toyota positioned Prius (and Honda its hybrid Civic) by aiming them at the correct audience. Hence the continued sales success.

  • avatar

    @limmin

    “… dumped it in our market (at a loss) for years …”

    Hmmm – what’s this then, the Damn if you do, Damn if you don’t mode of automotive innovation?
    I see Press is turning the dollar and looking at the back as far as TMC is concerned but let’s get things in perspective.

    An enormous amount of money was spent developing Hybrid Synergy Drive. GM engineers knew exactly how much would be required, which is why Lutz had few kind words for the entire concept. Ford tried to emulate the principle and had to give up.
    It was that hard, and very expensive.

    You can’t recover that in the first year of sales, maybe not even in the first ten. Spinmeisters now have it that the Japanese government paid for the effort – it’s quite possible that some gov’t funds were channeled into the work, not unusual in some economies, including that of the US, where the money isn’t spent on the automotive industry, but instead goes to farmers growing gas.

    Toyota didn’t dump the Prius.
    They built it, and introduced it, probably at a loss – something they could permit themselves because they are a hugely profitable company that also tends to look far into the future.
    Will the Hybrid Synergy Drive pay off? I’d say it probably already has – GM is spending billions on advertising and additional billions on incentives, without getting much for that. Toyota got incredible marketing effect out of the Prius, and I wouldn’t be surprised if that marketing effect actually compensated for the development cost of HSD.

    As stated above: There is Prius, and nothing else.
    Sounds to me like someone did something very smart.

  • avatar
    Raskolnikov

    @ limmin
    GM’s hybrids aren’t selling because, well, they just plain stink. The truck hybrids aren’t true hybrids at all. And the Malibu hybrid is barely more economical than the base 4cyl. GM needs a dedicated hybrid.

    Wrong. The 2 mode Hybrid IS a “true” hybrid system. Its been working fabulously in transit buses for 5 years; do a little research and you’ll find its a very well engineered system. The problem is its cost. Economies of scale will take care of that, eventually.
    HSD cost a buttload when it was rolled out, too.

  • avatar
    NN

    GM is slow to roll out everything…has always been, as far as I know. I would say 450 Tahoe/Yukon Hybrids isn’t bad, really, for this past month. I doubt there are many in stock. It is probably the first month that they were available anywhere. The Malibu had the same problem. The Solstice had the same problem.

    I haven’t heard of a Malibu or an 08′ Vue hybrid in stock, either. I have seen the Aura hybrid in stock, but a) the Aura only sells 5-6k cars a month, period, and b) the Aura hybrid is not much of a hybrid (the Malibu won’t be, either, but at least it has better marketing potential and a greater audience). To date GM’s hybrid offerings have largely existed only in advertising. This hasn’t quite changed yet, and is why the figures suck so bad.

  • avatar
    KixStart

    Late last fall, while refueling my Toyota, I happened to run into a Saturn dealership employee gassing up an Aura hybrid. Surprised to see one, I inquired, casually, about it. Sure, they had ’em in stock. “Make you a good trade on that.”

    Fast-forward three, possibly four months and, nationwide they’re selling about 30/month? Or do I live in the test-market area for these things?

    Sure, the Aura, as a whole, sells slowly… but it DOES sell. Hybrid penetration seems to be about .5%. This program wasn’t worth doing. Saturn’s best strategy would have been to make the car more compelling in the short term and then, for the next significant upgrade, add the hybrid.

    Or find a way to make the value proposition better… cut the price of the BAS hybrid option and/or make it more effective. Both.

  • avatar
    Raskolnikov

    Another thing, until you know what GM’s targets are for their hybrid vehicles, then it’s irresponsible to post huge headlines saying they “suck.”

    If they forecast 100 hybrid sales in March then they did pretty damn well. If they forecast 1000 sales in March then you can confidently say they suck.

  • avatar
    Buick61

    KixStart :
    April 2nd, 2008 at 9:44 am

    Late last fall, while refueling my Toyota, I happened to run into a Saturn dealership employee gassing up an Aura hybrid. Surprised to see one, I inquired, casually, about it. Sure, they had ‘em in stock. “Make you a good trade on that.”

    Fast-forward three, possibly four months and, nationwide they’re selling about 30/month? Or do I live in the test-market area for these things?

    They HAD Aura Hybrids last year. Then for some reason, the supply dried up. The same is true for the new VUE hybrid and the Malibu hybrid.

    So, the sales numbers seem to be low because of supply, not demand.

  • avatar
    GS650G

    Considering one of the two points to owning a hybrid is economy paying a premium for it makes no sense whatsoever. Saving the planet may be worth a few grand more to some but not all.

  • avatar
    Kevin

    The distinctive-model Prius approach is the way to go — but I don’t think it’s always just about showing off your environmental credentials. I could care less about the environment but I like the Prius and would be tempted to buy one.

    The hybrid doesn’t “pay for itself”, but so what? Prius is a unique car with features some people like and will pay for. No one demands that an Accord to pay for itself versus a Civic, or even a Nissan Maxima to pay for itself versus an Altima. There are nearly 300 different car models in the US and people don’t normally count whether the 299 of them will pay for themselves versus the cheapest model out there.

    But when the ONLY distinction between a Buick Bloatmaster and Buick Bloatmaster Hyrid is a hybrid drive train, now you’re forcing a consumer to put a value on the hybrid gear — and that’s a losing proposition for now.

  • avatar
    CSJohnston

    The Prius is selling in quantity and all other hybrid models are fair to middling saleswise.

    That seems to be the consensus here.

    Does this not raise the bigger question of whether or not the Prius is a fad versus a trend?

    Do people buy a Prius partially for its “smug factor” and avoid other models because they lack that factor?

    Just throwin’ it out there…

  • avatar
    KixStart

    There’s slow to roll out and then there’s glaciers marching, slowly and majestically to the sea. One needn’t be a registered AGW Alarmist, to see the glaciers picking up steam and rocketing ahead of GM’s logistics.

    While neither the BAS nor the two-mode hybrid may be the smartest marketing concept in the industry, unless the incremental production costs are killers, GM really should ship some of these things to the dealers and get a little return on their already considerable development investment.

    If there IS demand for these things, it can’t be good to have people coming in only to get turned away because they’re unobtainable.

    Maximum Bob assured us that the gas guzzling nature of the two-mode hybrid made great economic sense… boosting the fuel economy by a significant percentage on the thirsty beasties would pay back handsomely. If Maximum Bob was right, then they should sell and GM should build them. If not… well, mabye it’s time for Maximum Bob to climb into his SSR and head for Sunnyside Retirement Village.

    One way or another, 450 units of a program that must have cost them quite a bit of money sure looks like “sucks” to me.

    Look at this another way… GM sold about 30K full-size SUVs last month. Of these, 1.5% were two-mode hybrids. Some ten percent were certainly at premium trim levels; Cadillac alone sold something like 3K units. The nearby Chevy long term SUV storage facility dealership is heavily stacked with $50K units. Premium trim levels may comprise a third of full-size SUV sales. Hybrid sales amount to less than 5% of that total.

    Considering that Toyota’s hybrids sold really, really well this month and the humble yet lovable Civic hybrid is moving pretty well, this performance is nothing less than embarassing for GM.

  • avatar
    M1EK

    “The hybrid doesn’t “pay for itself”, but so what?”

    It DOES in the Prius. That, more than anything else, is why people are buying the thing. Those who claim otherwise are invariably using FUD like comparing it to the Corolla rather than to midsize cars; or pretending the battery is still an issue; etc.

  • avatar
    geozinger

    While the Prius has been rather successful in establishing a brand, there are some misconceptions here.

    Like someone else posted earlier, it’s hard to prove that GM’s hybrids sales suck, if there were no targets published.

    The way I understand it, when Ford was researching and patenting it’s hybrid drive, apparently there were many similarities to the Toyota HSD system. Rather than fight each other in court, they decided to trade technology (Ford got some HSD stuff, Toyota got some diesel stuff).

    Personally, I have only passenger seat experience with the Prius, but it seems like a well finished car, as most of them are these days. On one hand, I find the Malibu/Aura hybrids not on the same level as the Prius, however, they are conceptually the same as the Honda hybrids. The advantage to the BAS setup is that it is simple, which I think would reap benefits as the car ages.

    Which, whether you purchased any of the non-Toyota hybrids (of the ones you can find) you still qualify for the tax breaks and depending upon where you live, the ridiculous perks, like being able to traverse the HOV lane with one person in the car. Talk about the opposite of the intended purpose…

    I would say that selling a product for less than the cost of production (for whatever purpose) is generally considered ‘dumping’. Whether it’s steel, textiles or finished automobiles, the practice is the same. I think that the Prius came about at a fortuitous time, especially considering the enlargement of the rest of the Toyota line.

    I don’t know what Mr. Press’ motivation was for saying what he did yesterday, but I guess we’ll find out eventually. Again, like noted before, it’s done everywhere else, too.

  • avatar
    jthorner

    One of the great things about a Prius is that is gives the utility advantages of being a hatchback. For some reason hatchbacks went out of style for ICE powered cars, but here the Prius rocks and rolls.

    CR’s rather demanding real world test clock the Prius at 44 MPG, which is better than anything else you can buy. The vehicles sells in the mids 20s price category against other midsized family cars.

    The bottom line is that for a great many people the Prius does everything they want it to do at a very reasonable price, with great fuel economy and it looks futuristic-cool to boot.

    Toyota hit a home-run while the rest of the pack’s efforts range from strike-outs (Aura Green-line) to singles (Civic hybrid).

  • avatar
    Wulv

    A couple more points to add: 1) the Prius is the only car out there that was developed specifically as a hybrid, all others are re-engineered vehicles. I don’t know if it really makes a difference, but in some peoples eyes, when someone says Hybrid, they think Prius because of that. It makes a visual statement that screams Hybrid! as you drive. 2) If you consider that people buying Hybrids are mostly looking at fuel economy numbers, The Prius and and Civic look well ahead of the pack, they are the only 2 in the 40’s on the fueleconomy.gov site.

  • avatar
    hwyhobo

    jthorner wrote: One of the great things about a Prius is that is gives the utility advantages of being a hatchback. For some reason hatchbacks went out of style for ICE powered cars, but here the Prius rocks and rolls.

    Absolutely. This goes back to what I said about targeting the right audience. Hatchbacks went out of style with manufacturers killing them in favor of high-profit-margin SUV behemoths. However, there is a distinct segment of buyers who will not buy SUVs. They want fuel efficiency, yet they also want utility and practicality of a hatchback. Prius met those needs perfectly. US manufacturers should be taking notice and learning. Taking cheap potshots at a winner is easy (“people buy them because they want to show off as greenies”) but it is not a winning strategy.

  • avatar
    cwerdna

    jolo: I don’t have the Japanese Prius sales, but you can see the historical US sales figures at http://www.priusonline.com/viewtopic.php?p=100109&sid=915d2dc92d0c4870586cef11484631aa#p100109.

    It looks like 839 were sold before launch + another 841 the first month, either that or 839 of the 841 sold in the first month were already pre-ordered.

  • avatar
    jmlee0695

    I found toyotas prius sales for the us in its second year (first full) they were 15,500

  • avatar
    KixStart

    jmlee0695, That’s about 1.3K/month, which doesn’t seem like all that much until we consider that the then-Prius was a) almost entirely new as a concept on the market b) gas was cheaper c) there was low market awareness and d) as I recall, it was pretty spendy, considering it was a lot like an Echo, which was pretty darned cheap and very good on gas.

    Your comment prompted me to go look back at Toyota’s Prius I sales. Checking June sales for 2003 (source, TheAutoChannel.com), I found that in ’03, Prius sales were about HALF that of the Echo, for June, 2003, year to date. In June, 2002, YTD, Prius sales were actually a larger fraction of Echo sales (a good pool eager early adopters, I suppose).

    In comparison, GM’s hybrid sales are a nearly negligible fraction of Tahoe/Yukon/Escalade sales at 3%.

    Looking at the Aura/Malibu hybrid is even more depressing. The Aura hybrid has, allegedly, been on the market for over 4 months and, yet, sales of the hybrid were, at most, 1/2% of the total Aura sales in March.

    The time for GM to introduce a hybrid (or any vehicle, for that matter) that doesn’t sell is long past. GM has had a few years of Toyota’s hybrid experience to envy scrutinize and having the evidence of how hybrids work in the marketplace before them, they should be able to do a workmanlike job of developing, manufacturing and marketing them in order to SELL them.

    GM needs some winners, not additional flops, no matter how whiz-bang they may be. If they can’t build profitable hybrids at this point, they should invest in developing, refining and enhancing more profitable cars and let the hybrids wait.

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