June Electric-Drive Sales Plunge On Low Inventory

By Danny King July 6, 2011

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Sales of hybrid-electric and all-electric vehicles in June plunged to their lowest levels in more than six years as inventory issues stemming from the March 11 earthquake and tsunami that struck Japan slowed sales of the Toyota Prius hybrid and Honda Civic and Insight hybrids to a relative crawl. The inventory challenges far offset the effect of Nissan having by far its best month for sales of the all-electric Leaf. June advanced-powertrain unit sales fell 30 percent from a year earlier and were down 17 percent from May to 14,762 vehicles. Advanced-powertrain models accounted for just 1.4 percent of total U.S. vehicle sales, down from 2.2 percent a year earlier. Monthly hybrid sales, which have declined for three straight months, were last below the 15,000 mark in February, 2006.

Toyota Motor Sales USA Inc., whose Prius accounted for more than half of 2010 U.S. hybrid sales, was most affected by the tsunami, with sales dropping 61 percent from a year earlier to 4,340 vehicles, the worst single month for Prius sales since September, 2004. Sales for Toyota’s Camry Hybrid dropped 59 percent from a year earlier and Highlander Hybrid sales plummeted a whopping 88 percent. American Honda Motor Co. Inc. also was affected, as Insight hybrid sales fell 32 percent from a year earlier to 1,021 vehicles, while Civic Hybrid sales declined 30 percent to 416 vehicles. “Advanced-drive sales are being more affected by inventory obstacles then demand,” said Edmunds.com Industry Analyst Ivan Drury. “Also keep in mind that as recently as 2005, only five hybrid models were available. Today, we have about 30 models to choose from."

070511 Hybrid Sales & MS - AO.jpgGas Prices Fall
Additionally, gasoline prices, which had been on a steady rise during the first part of the year, leveled off, perhaps taking some of the impetus out of buying alternative-fuel vehicles. The average regular U.S. gas price on July 1 was about $3.55 a gallon, down from about $3.70 on June 1 and about $3.90 on May 1, according to AAA. Such a drop in gas prices may have dented sales at Ford Motor Co., where hybrid unit sales dropped 34 percent from a year earlier as both the Escape and Fusion Hybrids saw substantial sales declines. Combined, Ford and General Motors Co. sold 3,139 electric-drive vehicles, down from 4,006 a year earlier. Still, Drury said that visitor traffic to Edmunds.com's advanced-drive vehicle sites in June was about 70 percent higher than a year earlier, indicating that inventory problems superseded the effect of falling gas prices.

Toyota has been unable to meet Prius demand in the U.S., its biggest market, since the March 11 earthquake and tsunami that devastated vast portions of the Northeastern Japan. The twin disasters cost Toyota one full month of Prius production followed by one month of production that was at just 30 percent of normal and a second month at 50 percent, Toyota spokesman Steve Curtis told AutoObserver late last month. He said there were only 2,960 Prius vehicles in the U.S. dealer inventory as of June 1, about a tenth of the average U.S. inventory of the cars last year.

Toyota has estimated that U.S. dealers will get 36,000 Prius hatchbacks for the summer sales season, but even at that, availability of the world's most-popular hybrid will remain very tight. The U.S. dealer inventory for the Prius as of June 23 was down to just four days' supply and many U.S. dealers had no Prius vehicles. Toyota is hoping production of the hybrid will return to normal levels by September – and begin to exceed those levels in October. "Expect July to look similar," said Drury. "Inventory still will be a deterrent to sales, fuel costs are projected to keep falling and there are no new products to boost consumer awareness."

070511 Hybrid Sales by Manu - AO.jpgLeaf Blooms
Widespread inventory problems offset the effect of both Nissan North America Inc. having by far its best-ever month with sales of the battery-electric Leaf and of sales of a number of other advanced-powertrain vehicles that weren't available a year ago. Nissan sold 1,708 Leafs in June, up 50 percent from May, while General Motors sold 561 Volt plug-in hybrids, which was up 17 percent from May and marked the vehicle's second-base month since debuting late last year. Meanwhile, Hyundai Motor America sold 1,305 Sonata Hybrids (top), making the model June's third best-selling advanced-powertrain vehicle behind the Prius and Leaf. Honda sold 966 units of its CR-Z hybrid sport coupe, while Ford sold 483 of its Lincoln MKZ hybrids.

Overall, automakers in June sold 1,052,757 vehicles in the U.S., a 7.1 percent increase from a year ago. But the Seasonally Adjusted Annual Rate (SAAR) came in at only 11.4 million vehicles – the lowest SAAR of 2011 and trailing the 11.8 million SAAR of May. As with their advanced powertrain vehicles, Toyota and Honda both saw their overall unit sales for June fall 21 percent from a year earlier because of inventory issues, with U.S. monthly sales counts at their lowest levels in 14 years. Toyota and Honda offset most of the effect of strong June sales from U.S. automakers. Chrysler's June unit sales jumped 30 percent from a year earlier, while GM and Ford each reported sales that were 11 percent more than a year earlier.

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