Demand for hybrids outpaces supply
As fuel prices climb, the wait can take months
Soaring gas prices heading into the summer driving season are sparking record demand for fuel-efficient hybrid cars, resulting in a short supply of the gas-electric vehicles at Boston-area dealerships.
While customers in early spring were able to drive new hybrids off lots, dealers now brandish waiting lists for the
"We can't get them in fast enough," said auto dealer Herb Chambers, owner of Herb Chambers Cos., based in Somerville. Chambers said hybrid orders are running ahead of last year at his Massachusetts and Rhode Island dealerships. "We could sell six or eight times as many Priuses if we could get the product from the manufacturer," he said.
Industry analysts attribute the backup to supply-chain problems. Manufacturers have finally deployed hybrid technology on a wider scale, but they have failed to create a global supplier and transport network that can get parts to assembly lines and vehicles to dealerships in time to satisfy consumers spooked by $4-a-gallon gas prices.
"All of a sudden demand has exploded, and they're not ready," said Kevin O'Marah, chief strategist for
O'Marah said US automakers have acute logistics shortcomings. But as the scarcity of domestic hybrids has boosted orders for Japanese models, it has also put pressure on the Toyota and Honda supply chains. "Since the US companies aren't capable of responding, all the demand is showing up at one door," O'Marah said.
Toyota Motor Corp. plans to ship between 170,000 and 180,000 Priuses to the United States this year, the same number as last year, but that won't be enough to meet demand. The company sold 79,675 Priuses in the first five months of 2008, up from the 76,747 sold in the same period last year. Worldwide, about 1 million have been sold since they were first introduced in Japan in 1997, more than half of them in the United States.
When the Priuses were introduced in the United States in 2000, customers waited months to get one of the cars, which were considered a novelty for early adopters. Since then, there have been waiting lists.
The new swarm of buyers includes not only previous owners of fuel-efficient compacts, dealers said, but also drivers of gas-guzzling vehicles who are trading in pickups, vans, and sport utility vehicles for hybrids.
Ernie Boch Jr., president and chief executive of Boch Enterprises in Norwood, said the jump in gas prices from $3 to $4 a gallon may have been a tipping point. "At first it was the tree huggers," Boch said, "but now everybody's purchasing hybrids."
That includes David Winthrop of Sharon. Winthrop planned to buy a sports car to replace his Audi, which had clocked more than 140,000 miles. But after talking to his wife and friends who switched to hybrids, Winthrop opted for a 2008 Prius. He took delivery Wednesday from Boch Toyota in Norwood, and became a convert.
"This is the way all vehicles should be - the gas motor combined with the DC [electric] motor," said Winthrop, who expects to get about 50 miles a gallon on his suburban commute, double the fuel efficiency of his Audi. "It gets phenomenal gas mileage. That's the best benefit. I saw gas at $4.09 a gallon today in South Norwood."
Like other hybrid owners, Winthrop also considers the car's reduced emissions a point of pride, though not the primary reason he bought a hybrid. Environmental advocates estimate today's hybrids can cut carbon dioxide emissions by almost half.
By last year, annual Prius sales had topped 9,000 in New England, an all-time high, but dealers still had ample inventory.
Though hybrids represent a small fraction of overall auto sales - Chambers estimated the cars will account for 3 to 4 percent of his business this year, up from less than 1 percent five years ago - they are the fastest-growing market segment. Hybrids are projected to make up a large share of the US automotive fleet in the future, especially if gas prices remain high or rise even more.
Other fuel-efficient cars, such as gas-only Honda Civics and Toyota Corollas, also are enjoying brisk sales, while sales of trucks and SUVs have been tumbling across the nation. Last week,
Still, questions remain about whether fuel savings on a hybrid will offset its higher sticker price over the life of the car. Honda's five-speed manual Civic hybrid sedan starts at $22,600 and gets 42 miles per gallon, compared with a starting price of $15,010 and a mileage estimate of 29 miles per gallon for the conventional Civic Sedan in its most basic version.
It is difficult to determine whether a hybrid ultimately will save a driver more than a conventional Civic or Corolla because operating costs depend not only on fluctuating fuel prices but also on where, how fast, and how long a car is driven.
But with the cost of hybrids climbing, many see fuel-efficient traditional compacts as a better alternative for most drivers. The Civic last month surpassed Ford's F-Series pickup to become the top-selling vehicle in the United States for the first time. But to get one, drivers will have to take a financial hit on their current car or truck - the trade-in value of gas-guzzlers has plummeted as the cachet of gas-stingy vehicles has increased.
"Everyone's concerned about the price of fuel," Chambers said. "The hard part is when it comes to trade-ins on trucks and SUVs, because we can't give people what they expect to get."
Robert Weisman can be reached at email@example.com.