Demand For Hybrids Prompts $5,000 Dealer Markups, Waiting List Auctions

[hatrack]

"Rising gas prices are spurring consumer interest in the Toyota Motor Corp.'s fuel-saving Prius sedan, but car buyers who want one are in for a tough time. In the latest sign that demand for the high-tech gas-and-electric car is growing, some dealers have begun tacking markups of $5,000 or more on top of the car's sticker price of $20,295 to $26,000.

With waiting lists for the vehicle now stretching six months or more, others have stopped taking deposits from interested customers. Spots on dealers' waiting lists are showing up on eBay where they are being auctioned for $500 or more.

The interest in the Prius is creating problems for Toyota. Its U.S. arm has a backlog of 22,000 orders that it cannot fill at the moment. It recently asked its Japanese headquarters for more Priuses, but is unsure how many it can get. Last fall, the U.S. allocation for the car was increased to 47,000 vehicles from 36,000. So now Toyota is yanking ads from cable television to avoid pulling into showrooms customers that it will only have to turn away.

The Prius isn't the only hybrid facing tight supplies. Honda Motor Corp., has a 10-day supply of its hybrid-powered Civic in inventory, far fewer than the 65 days' supply that car makers like to have."

EDIT

http://www.tucsoncitizen.com/breaking/061004_hybrid_markups.html

[Cronus Protagonist]

1. So they have a product that's in high demand and they're not making enough

Sounds like someone dropped the ball.

BLAME BUSH FIRST!

Click here for "BLAME BUSH FIRST", and other fair and balanced yet stunning buttons, magnets and stickers

[tridim]

2. Dealer markup (above MSRP) should be illegal

Especially on eco-friendly economy cars. Not that I can afford a new car anyway, thanks to Bush's "roaring" economy. I can't wait to see the Hummer/SUV sales figures for this year.

[Maurkov]

7. Why government intervention?

What exactly would it fix?

[noahmijo]

3. It's basic microeconomics

When demand exceeds supply prices go up. Likewise consumer behavior as far as hybrids go appear to be signaling that prices aren't a huge issue: they want the cars and they want them now.

Hell I want one of those hybrids dammit.

[billbuckhead]

4. If Gore was President, these would have been the star cars instead of

monster SUV's like Hummers and Escalades, etc

[noahmijo]

5. Yea well if anything this is a positive sign in a way

Because it's proof that the American people are clamoring for fuel efficient cars. Eventually within a few years hopefully fuel efficient vehicles will be the norm.

[Nay]

6. I'm glad Americans are interested in efficient cars, but really,

the $25,000 you would use to buy one puts an awful lot of gas in the old car.

[NNadir]

8. Personally, I'm amused and thrilled by this news.

Toyota is showing the world that you can make big money by investing in environmentally sound strategies. I remind everyone that American automotive companies made some of the most stupid business remarks in their abysmal history of making stupid remarks (and stupid decisions) when they treated this effort like some kind of joke.

Who's laughing now?

I hope Toyota makes a bundle. I hope the rest of the corporate planet feels extremely frightened by the notion they have fallen distantly behind. I hope they're firing marketing executive MBA's who jerked each other off trying to think how they could make a bigger and more obscene SUV. I hope there' general corporate panic from the showroom to the boardroom.

The reason I'm in favor of fear in this place is because, well, there's something to be afraid of, and it has very little to do with profit margin on the Prius.

[Physicist]

9. The dealers should have to bid against each other.

Maybe the factory should just put them on e-bay.

I hope someone in the auto industry has the business smarts to license the Prius' technology for other manufacturers to produce.

[hatrack]

10. Ford's hybrid Escape is under legal agreement with Toyota

It's not that Toyota is selling them all the parts (though I think Aishin may be providing some), but that the Ford concept is so similar that Toyota has licensing rights.

Good ol' American ingenuity NOT called upon once again by the frickin' bean counters - until it's way too late, of course.

[amandabeech]

11. Ford has stated that they have been working on the technology

for several years independently from Toyota. Ford stated that the company wished to increase its technological understanding of hybrids rather than just license what had been done by Toyota. Ford's attorneys judged a smallish portion of the Ford-developed technology to be so similar to the Toyota that the attorneys basically forced Ford to obtain a license from Toyota to avoid problems. Perhaps the technology was similar because certain engineering solutions are obvious to engineers everywhere. Toyota has confirmed Ford's story.

GM has reported that Toyota offered GM the hybrid technology, but that GM turned it down for various completely absurd reasons. Toyota probably offered it to GM because GM and Toyota have been working together for some time. Their joint effort started, I believe, with the Corolla/Prizm clones made at a factory in California. It is that same factory, I believe, that is now producing the Matrix/Vibe clones.

Actually, I drove the Vibe recently as a rental, and it was a nice, medium-sized vehicle with a snappy design that makes it look SUV'ish. It's really like a large hatchback with fold-down rear seats. It has enormous headroom for tall folks, but I'd like a driver's seat that would adjust up six inches. Also, the rear trunk-like compartment should be better secured, IMHO. It would be a good choice for a hybrid.

Ironically, I have recently read (here?) that GM is making hybrid city busses that get 40-60% better mileage than normal city busses. The article, and I wish I could remember where I read it, reported that some 200+ busses were sold to Seattle or Portland and the surrounding area. Why GM wouldn't want that in a car, I don't know. Perhaps GM will change its mind.

My additional recollection is that Nissan has licensed the hybrid technology from either Honda or Toyota.

I believe that I've written a similar post, Hatrack, in response to one of your hybrid-related articles. I'm just regurgitating it here for some balance.