Guy Ferguson is in charge of inventory at Precision Toyota of Tucson. Every day he fields requests from customers for cars he knows he can’t get for them for at least three weeks. What’s the fuss? Hybrids. Alot of people want them and supply just can’t keep up with the demand. Now that consumers have seen $4 per gallon gasoline - and are relieved that’s it less than that now - the reality has set in that fuel efficient cars such as the Toyota Prius make sense. In fact, the sales velocity of the Prius is faster than any other vehicle on the lot at Precision Toyota, 700 W. Wetmore road. The demand is so great, Ferguson says the average number of days a Prius stays in stock is zero. Not only that, he says he has 50 Prius orders to process — but no cars.
The Prius usually retails between $25,000 and $30,000. It is one of three Toyota-made models that are among the top 10 most fuel efficient cars being sold in the world. "We sold about 70 Priuses in April," Ferguson said. "We got 18 in May to replace the 70 with. In June we got 20 Priuses for the whole month." In July, Precision got 25 Priuses. "The problem is, there’s just not enough cars," he said. "The demand, not only in this country but in other parts of the world, has gone through the roof. The first year the Prius was offered in the U.S. [Toyota provided] a little over 20,000 units. This year it was a little over 170,000 and we still can’t fill demand."
|
|
Neb Yonas, general manager of Chapman Automotive, says his Honda dealership, 4646 E. 22nd St., can’t keep Civic Hybrids in stock either. He has no hybrids on the lot and a growing waiting list of 15 to 20 buyers willing to pay an average of about $25,000. This month at Chapman Volkswagen, 4500 E. 22nd St., Yonas was expecting to receive his first shipment of 15 of another popular car capable of getting high mileage — the newly engineered Volkswagen diesels, which will start at $22,640 for the base model with manual transmission. If things go as expected, they won’t last long on the lot either. The demand for alternative fuel and fuel-efficient vehicles has even caused Yonas to consider greening the whole Chapman store — from the inside out. "It’s the right thing to do," he says.
Alternative fuel vehicle licensing and sales have a bit of a dubious past in Arizona.In 2000, then-governor Jane Hull had to put a moratorium on the state’s alternative fuel incentive program. The program, which offered to pay for 30 percent of new alternative-fuel vehicles plus vehicle conversion costs, spiked business for car dealerships, but at the expense of the state budget. The kicker was one big loophole: it didn’t actually require consumers to use the alternative options on their cars. The program, which earned national attention and ended the careers of some prominent lawmakers, cost the state about $140 million. No doubt in response to the program’s demise, the number of registered alternative fuel vehicles in Arizona has actually dropped in the last five years, from 13,330 in 2003 to 11,799 in 2008, according to the Arizona Department of Transportation’s Motor Vehicles Division.
Even with hybrid sales up — at least locally — national car sales are lower than they have been in 10 years. The New York Times reported that this June, Chrysler sales fell 36 percent from last year’s benchmark, Ford was down 28 percent, Toyota (maker of the Prius) was down 21 percent and General Motors was down 18 percent. This summer there have also been reports that Hummer, the military-inspired vehicle whose sales skyrocketed at one point with waiting lists not dissimilar to the coveted hybrids of today, found it sales falling for the first half of this year by 40 percent. Executives at Royal Hummer, 4333 E. Speedway, declined to talk about their brand or the industry in general.
A "green" concept version that runs on biodiesel, called the Hummer HX, was unveiled in January at the 2008 North American International Auto Show. Production of the Hummer HX hasn’t been announced.
To abate the current drop in overall sales, dealerships have stepped up buyer incentives as a way to keep cars moving off the lots.
"The manufacturer does incentivize [larger trucks]," says Precision’s Ferguson. "With trucks they throw three to four thousand dollars per truck to get them to move — and they’re losing that on every truck, which is in the hundreds of millions of dollars. But the small cars don’t have very much mark-up in them." He says rising transportation costs are also squeezing dealers. Ed Fraser, training coordinator for new sales representatives at Precision, says that as the hybrids sell-out, the smaller, more fuel-efficient cars are the next to go.
"We have two Corollas left. We had four this morning and we have two now," he said. "You can see, as the hybrids have been taken off the table, then the Yaris [goes], then the Corolla, then the Camry will be next. It’s the smaller cars, the best fuel-economy cars that people are turning to."
What’s even more in demand than a hybrid? At 75-plus miles per gallon, and a starting price of $1,500, gas and electric scooters have become the most trend-setting vehicle on the market. "We’ve seen a steady increase in sales since we opened in 2003," says Brandon Owens, a salesperson at ScootOver, 4534 E. Broadway. "But since mid-April of this year, we’ve been selling a lot more - about 40 per month and I don’t see it slowing anytime soon."SmartMoney magazine reports annual sales of scooters have tripled since 2000 to a whizzing 130,000. But then there’s that other problem — the waiting list is long as manufacturers scramble to meet demand.








Comments
Jerry Polick wrote on Sep 26, 2008 10:22 AM: