Green Update: Are Hybrids and Small Cars Selling?

August 9th, 2011
Ford C-Max Energi

Ford C-Max Energi

You wouldn’t know it from all the hoopla on the blogs, but car sales, per the Wall Street Journal, generally were mixed for July. GM and Ford small cars “showed some modest gains.” Given what the stock market did in the last few days, those gains may well evaporate for August.

Regarding small-car sales figures, it’s hard to know who to believe. Fortune tells us:

Through July, the small-car segment rose to 17.4 percent of all car sales, accounting for nearly 1.4 million cars built in the U.S. Midsize, large and luxury cars gained as well, though less so proportionately. In other words, small cars, accounting for a third of all car sales, were the only category to gain share.

Automotive News reported 1,059,730 light vehicles sold (not 1.4 million) and stressed the disruptions and uncertainty in the economy. Autoweek says U.S. light vehicle sales were up 13 percent (through June), though demand has been weakening.

And the news isn’t all bad: egmCarTech says hybrid sales for July were up 54.3 percent, with the Prius leading the way, of course, with 7,907 sold. Hyundai’s Sonata Hybrid was next, with 4,177 sold, beating most of the other hybrids, including Toyota’s and Ford’s.

But let’s not forget that hybrids are still less than 2 percent of the vehicle market.

The public is clearly being picky about which small cars it wants to buy. The Jetta is doing very well, giving a big boost to the Volkswagen brand. Ford’s C-segment cars have done well in the global market, and the company will bring new versions of them to the U.S. in 2012 in the form of the C-Max Hybrid and C-Max Energi plug-in.

RAV-4 ElectricThese are compact crossovers, based on the Focus, but designed to appeal to young families. So is the new Toyota-Tesla RAV4 all-electric (right), finally going into production in Canada next year, with a range of about 100 miles (they say).

Car companies big and small are pushing out new and interesting small cars in an attempt to keep the movement alive. And they may well increase incentives (rebates, low interest rates, etc.)—even Japanese brands like Honda that have avoided them.

But people are scared, angry, out of work and lacking confidence in their government. They are being whipsawed by the stock market and the messages (or lack of them) coming out of Washington. How are you going to get them into new cars in an environment like that?

Should the automakers bring back more incentives (and cut into their own profits)?

—jgoods

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  1. Randy
    August 9th, 2011 at 17:36 | #1

    Carmakers are in a constant battle between profit and sales volume. GM has been pursuing a strategy of higher prices (by reducing incentives) and Ford is traditionally a higher-priced lineup. You can count on them to be flexible in what they do to attract buyers (when buyers start staying away) although the ultra luxury market usually remains unaffected.

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