Hybrid Vehicles Fading Appeal

By: Stacey Wilson


Hybrid vehicles show decline in sales. The change in heart of auto owners is attributed to the cut in gasoline prices. In this regard, some auto enthusiasts are saying that hybrid vehicles' appeal is fading away.

Toyota and Honda automakers have enjoyed hybrid hype the most. This is because, their hybrid vehicles made it big in the auto market at once. In July this year, gasoline prices were high and consumer intended to save on fuel costs so they shifted to vehicles that run on both a gas-powered engine and an electric motor peaked at an annual rate of nearly 1.5 million units, this information was divulged by Edmunds.com, an automotive shopping website.

However, in August, sales of hybrid vehicles dropped sharply. Further, tax credits, which have significantly pulled sales, were reduced. Starting from the month of September up to the present, the famous Prius, which is made up of sophisticated , experienced drop in sales. About 22.4 percent decline in hybrid sales is suffered by Toyota.

According to Alex Rosten, Edmunds.com's manager of pricing and market analysis, the downturn that can be attributed in large part to a quirk in federal law. He added, "The tax credit has played a large role, and it will expire at the end of 2007 unless Congress renews it." On the one hand, Rosten said that there will always be a demand for hybrids from "green" consumers. In this regard, automakers are working to make their hybrids more affordable. in Vue Green Line hybrid, for instance, are now more reasonably priced. As a fact, the hybrid just costs $1,000 more than the regular Saturn Vue.

Also, analysts in the industry said that will not give savings to the consumers. Rebecca Lindland, auto analyst at Global Insight said that a driver who buys a Honda Accord hybrid, which can cost some $3,000 more than a regular model, will need 10 to 12 years to break even in fuel savings, assuming the price of gas remains within the $2.50 to $3 range. "To get that saving you have to drive 15,000 miles a year, and if you are driving a hybrid 15,000 miles a year, you are doing a lot of highway driving and not maximizing the best use of your vehicle," Lindland continued.

"The other possibility is diesel," Lindland concluded. New regulations requiring low-sulfur diesel fuels, which went into effect this fall, are likely to boost the popularity of diesel vehicles in the United States. Those vehicles are already popular in Europe. (Diesel) has got a really bad rap because most of us think of it as loud and smelly, but this is not your father's diesel," she continued. "Cars that run on diesel get consistently better mileage than gas engines, whether on the highway or in the city. That's the huge advantage they have over hybrids - they are not as 'duty-cycle' sensitive."

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