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Sales of hybrid models in February fared somewhat better than the overall market—falling “only” 29 percent. Incentive spending on all vehicles ballooned as manufacturers desperately tried to “move metal.”

Hybrid Heatmap

In this month’s version, we take a look at where buyers purchased luxury hybrids in 2008. We use $40,000 as the cutoff, so that means buyers of all Lexus hybrid models, as well as purchasers of GM’s full-size SUV hybrids. If anything, this heatmap further entrenches the West and Northeast capitals as strongholds for hybrid buying, and almost completely strips out the heartland of the country, especially the Deep South, parts of New England, and, with some exceptions, the Mid-West. Those regions are not likely to become hot spots for hybrid buying, and could be almost completely written off for any advanced technology vehicle selling for $40,000 or more. When General Motors introduces the Chevy Volt in 2010, it will focus on the coasts and ignore the heartland.

Analysis of February 2009 Sales Numbers

"Top 5 global hybrid markets" based on vehicle registrations CYTD December 2008.

and "Top 5 US hybrid markets" based on vehicle registrations CYTD December 2008.

Don’t be fooled by the slight uptick in car sales from January: the auto market is still in miserable shape. Overall sales are down 41 percent from February 2008, and have sunk to levels not seen since the late 1960s. Sales of hybrid models have fared somewhat better—falling 29 percent—but are still well below last year’s levels. The only model showing sales growth last month was the Lexus RX 400h; most likely the effect of heavy discounting as the 2008 RX400h nears the end of its production cycle and Lexus begins to prepare for the launch of the 2010 RX450h later in the year.

The RX Hybrid wasn’t the only model to have cash on the hood last month. Incentive spending on all vehicles ballooned in February as manufacturers desperately tried to “move metal.” Carmakers offered discounts averaging almost $3,000 per vehicle, and hybrids were not exempt. Dealer or consumer incentives were available on numerous 2009 hybrids, including the Chevrolet Tahoe Hybrid, the Honda Civic Hybrid, the Toyota Prius, Toyota Camry Hybrid, and the Nissan Altima Hybrid. Clearly many car shoppers have taken themselves out of the market, but manufacturers seem to believe that some buyers will jump back in if the deals are attractive enough.

If any new hybrid has a chance in this market, it’s the 2009 Honda Insight that’s due to launch next month. Last week, Honda announced pricing for the new Insight: base models will start at just $19,800, plus $670 in destination charges. That’s $2,200 below the cost of the cheapest Toyota Prius, a full 10 percent discount. And Honda will be making a major marketing effort to portray the Insight as the first hybrid affordable to mainstream buyers. Of course, the Insight’s hybrid technology isn’t as advanced or its fuel economy as high as the Prius, but in this market many buyers are likely to see the Insight as an accessible option that delivers good features and respectable fuel economy. Sales results in Japan so far have been promising, doubling Honda’s initial estimates. However, Honda might have a hard time reaching its ambitious goal of selling 100,000 units per year of the “value hybrid” in North America—until the economy shows signs of recovery.

US Sales

Our information is based on hybrid sales as reported by the manufacturers. For each model, this month’s sales are shown compared to sales in the previous month and at the same time last year. We also examine hybrid market share by model and manufacturer. The historical sales graph for top-selling hybrid models shows estimated 2008 volumes based on sales-to-date.

Hybrids sold in the US (February 2009): 16,020

Regional Data