Destroying the notion that hybrids sell themselves,Motor Sales U.S.A. Inc. and Motor Co. have had to succumb to incentives to move their hybrid cross/utility vehicles, which have been spending more time on dealer lots than either manufacturer wants.
How effective those turn out to be – next week’s March sales report will tell the tale – may determine whether incentives are a short-term fix for a temporary marketing hiccup or a new long-term reality.
is offering reduced-rate financing, 3.9% for 60 months, on the Highlander Hybrid to help move the vehicle. The deal runs March 1-April 3 and is available nationwide.
Recent college graduates can combine the offer with a $400 rebate, good until March 31.
Sales of the Highlander Hybrid, launched in the U.S. last June, have been below expectations, with 17,954 sold last year, according to Ward's data. The auto maker had targeted sales of 20,000 units for the partial year, a spokesman says.
During the first two months of 2006, Toyota sold 4,984 Highlander Hybrids, which translates into a 30,000-unit annual rate.
The auto maker initially intended to sell 47,000 units this year, the spokesman says, and has cut production to a rate of 30,000 units annually as a result.
Back in January, Toyota offered a special lease on the Highlander Hybrid, the spokesman says, adding another incentive program could be instituted if the vehicle continues to sell below expectations.
“They review that on a month-to-month basis, so if (the incentive is) working, and we’re getting the inventory where we want it at, then they’ll probably remove it,” he says of the spiff. “But if there’s still excess inventory (Toyota will) keep it on.”
Meanwhile,currently is offering buyers in the key hybrid markets of Washington D.C. and California 0% financing for 60 months or $1,000 cash on Escape Hybrids sold through April 3. An ’06 Escape Hybrid stickers for $27,515. That compares with $24,005 for an Escape with a V-6 engine.
Ford sold 15,591 Escape Hybrids in 2005 and has delivered 2,034 in the first two months of 2006.
Once thought to be sure hits, certain hybrid models are proving more susceptible to sales downturns than originally thought.
Last year AmericanMotor Co. Inc. placed incentives on its Accord Hybrid sedan as demand slowed.
“I actually think that it’s a consumer choice and price point (issue),” Rainforest Action Network’s Jennifer Krill, zero emissions campaign director, says of why sales have been sluggish for certain hybrid models.
Krill also thinks more marketing of hybrids in general would be beneficial, saying she hasn’t seenmake much of an effort to push its hybrid cars, and that Ford only recently has begun an advertising campaign to push the Escape Hybrid.