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April 30, 2006

Prius not seeing sales increase despite gas prices

Seems as though there is a bit of a highbred car backlash. The gas savings may not make up the premium price paid for the car.

CNN:

Gaspump_2 Many U.S. consumers are concluding that what they save in gasoline and on tax credits from driving a hybrid does not justify the roughly $3,000 premium they face at the dealership, even with high and volatile fuel prices, analysts said.

That poses a problem for car makers including Honda Motor Co. Ltd., Ford Motor Co. and Toyota Motor Corp., that have bet on broadening popularity for hybrids, including more powerful six-cylinder models and sport utility vehicles.

"What it comes down to is whether you want to pay for that premium right up front... or pay for it incrementally in the form of a different vehicle that gets a slightly lower fuel economy," CSM Worldwide analyst Mike Jackson said.

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Comments

Noah

I think it would be rather short-sighted to conclude that hybrids are a bad bet. I agree that the prices right now are prohibitive, but this is the beginning of the hybrid revolution. Companies like Toyota are betting large stakes in their hybrid technology. As it develops and more of their line implements hybrid technology, prices will drop into a more reasonable range. That is when you will see a boom in hybrid sales.

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