Hybrid Sales Return to Growth

The first plug-in hybrids and electric cars will mostly have symbolic value�and not much real impact on the size of the hybrid market. Meanwhile, sales of conventional hybrids are expected to grow for the first time since the big jump from about 250,000 sales in 2006 to 350,000 in 2007. The Great Recession wiped out the auto market in the second half of 2008, taking hybrids along with it. Hybrids have performed better than the overall market during the doldrums�but lack of consumer credit, a general economic malaise, and relatively low gas prices have meant a slow recovery.
A number of factors might conspire to lift hybrid sales back to 2007 levels�and help hybrids reach 3 or 4 percent of the new car market. We expect Toyota to increase production and output, and Ford�coming of the critical success of the 2010 Ford Fusion Hybrid�to get more aggressive with hybrid marketing and sales. The most significant is the price at the pumps. As 2009 winds down, the price of oil remains within striking distance of $100 a barrel. If oil prices surge and average national gas prices climb above $3 a gallon in 2010, expect hybrid sales to heat up like hotcakes again. Other factors include overall growth in the car market, increased hybrid and battery production capacity, and new models rolling out�both from hybrid stalwarts like Toyota and Honda, and newcomers such as Hyundai, BMW, Mercedes, Porsche and Dodge. Remember, the clock is ticking as car companies brace for the increase in national efficiency standards beginning in 2012.