Honda's Insight hybrid may fall 33% short of U.S. sales goals. Why? America's already forgotten last summer's record high gas prices. Even with a recent 30% price increase, gas's still cheap for the moment. So, are appliance-driving consumers just stupid?
The general American driving consumer is stupid with a weak stomach for high gas prices, seeking fuel efficient alternatives like lemmings seek a cliff the moment prices hit record highs. Those pains are quickly forgotten the instant gas prices drop to levels more tolerant to their cow-like sensibilities. What? Do they think lower gas prices are a permanent condition?
As enthusiasts, we know better. We seek to find a fuel efficient offering with the highest possible performance, own two cars — a daily driver and something more fun — or we suck it up and realize we have to pay more for what we want. Want a Corvette ZR1? A Nissan GT-R? We know there's a tax involved with driving real cars and we'll be paying it every time we head to the pump for the privilege of driving something with higher horsepower.
What the general consumer needs to remember is they don't need SUVs the size of mobile homes or pickup trucks able to haul 10,000 pounds to get to work each day (unless of course they work on a construction site).
Appliances are what's needed for most Americans. Simple, fuel-efficient appliances that allow them to get from A to B with ease and without disrupting them from their super-sized McDonald's latte. However, as long as gas prices stay below $3.00 a gallon, hybrids and other more fuel-efficient driving alternatives will continue to be pushed to the wayside for bigger, thirstier options.
We've seen exactly that happen during this economic slump. There's been a 30% increase in gas prices, but it's still relatively cheap in comparison to the highs of last summer. So what's happened to hybrid sales? Well, news today is Honda's Insight hybrid may fall 33% short of U.S. sales goals (50-60,000 units versus 90,000 originally projected). This after Toyota reported U.S. sales of the Prius are down a whopping 45% in 2009. What should automakers expect? Combine lower gas prices with a heavily-saturated marketplace — including Toyota's current Prius, next-generation Prius and the Fusion hybrid — and we're talking about a continued drop in demand for fuel efficient vehicles. And what are the #1 and #2 highest-selling vehicles in the U.S. last month? The Ford F-150 and Chevy Silverado. Trust us, these aren't being used on job sites.
These cars are already available or soon to be available, but at gas prices at levels not seen during peak driving season in three years, they're not what Americans are buying. So back to the Insight. For the moment it means lower sales. However, the moment gas prices spike again — whether through a recovering economy or a supply disruption — expect consumers to make a beeline to the Insight as though it were some kind of hybrid honey.
In the long term, if we want to get off this merry-go-round of lemming-like behavior, we need to recognize as a society that gas prices are the greatest single influence on American driving habits. But no politician has the political will to do the right thing to really change consumer driving habits — implementing a progressively and artificially increase to the price of gas. Instead we'll continue our fun game of mandating automakers kill off "fun cars" for us enthusiasts out of a desire to increase fuel economy — a feature American appliance-driving consumers apparently don't desire.