Is Toyota’s King Of Hybrid Sales – the Prius – Losing Its Edge?

Last month the equivalent of the sun not rising happened in the U.S. hybrid market: Toyota’s Prius Liftback did not finish the month with the most sales.

Since last decade, the Prius has been the proverbial king of the hybrid market, and in recent years its monthly sales regularly doubled or tripled those of the next-closest hybrid, often a Prius c, Prius v, or Camry Hybrid, but that streak has been broken.

What, you may ask, was the vehicle that for the first time this decade outsold Toyota’s hatchback that’s as associated with the term “hybrid” as “Kleenex” is with tissues? The Ford Fusion Hybrid, and its 4,856 sales mildly surpassed the 4,553 of the Prius Liftback.

This turn of events follows a lackluster first year in 2016 for the fourth-generation Prius in which sales were down by 13 percent.

What does this mean? Maybe nothing much, or more likely it’s a symptom of several factors.

An Anomaly

2017_Fusion_design-e1480391252225

According to analyst Alan Baum, the indignity of a Ford Fusion Hybrid ousting the Prius from January’s top spot should probably be treated for now as an anomaly.

January 2017 happened to be the best sales month on record for the revised 2017 Ford and the worst month since April 2011 for the Prius. Ford has had a few other months in the middle 4,000s, so it was not that much of an outlier for it, but the Prius is otherwise quite down from sales above 6,000 it’s previously enjoyed.

So, chalk last month up to bad timing, and forget it right? Potentially. Odds are good next month the Prius will rebound to number one again, but that does not mean all is well.

2016 Prius Sales Down

More telling is the entire first year of sales that were not better, but actually 13-percent worse than those of the outgoing 2015 Prius. Given pent-up interest prior to the fully redesigned 52-56-mpg car, one might have expected a year-over-year sales increase, but this did not happen.

Toyota’s Claudia Rodriguez, Prius marketing manager, said the Prius still holds a strong lead however, and 2016 was a time of overall decline in the hybrid market.

“In 2016, we saw that low fuel prices continued to drive sales towards trucks and SUVs,” said Rodriguez. “But we know fuel prices ebb and flow over time. We take a long-term view when it comes to our product decisions and we believe Prius is well-positioned to deliver environmental benefits and a lot more.”

The phenomenon of car purchases being tied to fuel prices is a long-documented reality for a reactive buying public. That hasn’t helped the hybrid market, and the status of the Prius is actually related to the perceived health of the entire hybrid market.

That is, because it carries so much weight, the Prius Liftback’s sales can swing the total market’s share.

Its peak year this decade, 2013, saw 145,000 units sold. Last year it sold 98,863 units followed by the RAV4 Hybrid’s 45,070, the Fusion Hybrid’s 33,648, and after that only a couple sold in the 20s, a couple in the teens, and many more hybrids sell fewer than 10,000 units annually.

That it is not as vigorous as it has been in years past is evident, and this may be dependent on a few other subjective variables besides low gas prices.

Beauty Contest

2016_Toyota_Prius_Two_Eco_13

The number one deciding factor among a list of other considerations consumers weigh in purchasing a car is exterior styling, and the new Prius has been polarizing.

Its design is being well received in its home country Japan, where it is manufactured and treated as a mainstream car, but armchair pundits with North American aesthetic sensibilities have in cases moaned and groaned for the strain on their eyes.

2017_ford_fusion-hybrid

Others say they find the new Prius quite fetching, but meanwhile, though the Prius carries a far more solid pedigree, and superior efficiency versus the Fusion Hybrid’s, the Ford blends in with the mainstream-handsome appearance of the Fusion family line

Toyota and Ford sales also include an unknown quantity of fleet sales in addition to retail sales, but a breakdown is not available between the two brands.

RAV4 Rising

2016_Toyota_Rav4_Limited_Hybrid_main-668x409

Another shift since last year has included the RAV4 Hybrid ascending to the second or third place in the U.S. hybrid sales roster, as the older Prius v wagon and Prius c subcompact have slipped a spot or two down.

Despite getting mpg only in the mid 30s, the RAV4 Hybrid’s AWD small sport-ute visage and pricing only $700 over non-hybrid versions with same equipment has helped its popularity a lot.

Another competitor, the Nissan Rogue Hybrid, is also due and said by its maker to be priced less than Toyota’s new hybrid sales leader.

More Competitors Coming

Hyundai_IONIQ_Hybrid-668x409

There are already several high-mpg sedans that have recently come along like the 48-mpg Honda Accord Hybrid, 46-mpg Malibu Hybrid, as well as those from Hyundai and Kia and others that represent choices opposed to a Prius Liftback.

Other cars that could vie with the Prius going forward include the 58 mpg Hyundai Ioniq Hybrid which was benchmarked against the Prius.

Its design makes it as a true expression of the phrase “imitation is the sincerest form of flattery,” but more than flattering, Hyundai wants market share.

The Ioniq – a trio, really, to come in hybrid, plug-in hybrid, and battery electric form – is being driven by the media next week, and the hybrid is due on sale then also.

Another alternative is the Kia Niro Hybrid, available in three trims from 40-50 mpg, and starting at a bit over $23,000.

Another alternative threatening to take mindshare is the Kia Niro Hybrid, available in three trims from 43-50 mpg, and starting at a bit below $23,000.

Soon enough all three will be out, and with regard to the Hybrid and PHEV Ioniq variants, the styling has been said to be more “welcoming” which is a euphemistic way of saying the Ioniq is more attractive then the Prius.

Depending on how it is priced, its alternative appeal and superior on paper efficiency could add to a strong alternative which was the goal since it was known for the past several years that Hyundai was gunning for Toyota’s hybrid.

Unknown, Baum said, is how effectively it will be marketed, supported at the dealer level, and what the bottom line value proposition shall be. Also not helping it necessarily is the Ioniq is a newcomer, whereas the Prius has been evolved since 1997 when it was first launched in Japan.

Plug-Ins Competitive

2016-Chevrolet-Volt-668x4091-668x409-668x409

It’s widely believed that many of the most progressive-minded buyers who once looked several years back at the Prius as a pinnacle of environmental effectiveness now look to plug-ins as a brighter shade of green.

While sales in the teens or 2,000s per month are not threatening to topple the Prius which sold 7,800 in December 2016, it is clear mindshare has been sapped by cars like the Chevy Volt, Nissan Leaf, and even upscale Tesla Model S and others. There are now actually 30 plug-in cars on the market which is quite an assortment of alternate choices.

Last year, when launching the new Prius, Toyota did what it could to invoke its environmental contribution – which remains significant – but it also broadened the appeal.

It gave the car superior handling to any Prius that came before, and is appealing to anyone who wants an economical and known reliable car.

That it’s not seen as an ultimate any more is otherwise a factor.

Prime Cannibalization?

2017_Toyota_Prius_Prime_Advanced-668x409

Another variable in the Prius Liftback’s relative competitiveness is its own plug-in sibling.

In its third month, the Prius Prime plug-in hybrid was the second best-seller in January – and unlike the Prius Liftack’s being January’s second-best seller, this was a badge of honor for the aspiring PHEV.

The Prime actually topped Tesla Model S and X sales after that automaker had sprinted to a December 2016 record finish and only the Chevy Volt beat the Prime’s 1,366 sales by just 245 units with 1,611 in January 2017.

In California, which has traditionally spoken for half of all plug-in sales, the Prime may be a prime competitor against the Liftback as it is priced midway in the Liftback’s range.

Rodriguez said on this possibility, it is too early to tell.

“We do not have that data yet to help us determine that with certainty,” said Rodruguez. “Unfortunately there is a lag on the data sources that allow us to do an analysis to be able to determine this.”

In any case, the Prime’s styling has been said by some to be a bit more attractive, so the Prime does represent a viable challenger to its own sibling.

It also qualifies for federal and state credits which may let it net for less than the Liftback, while getting the same 52 mpg in hybrid mode, plus 25 miles electric range versus none.

Hybrid Market Fading?

Analyst Alan Baum flatly refutes the notion that the hybrid market is in danger of being superceded by plug-ins. Plug-ins, though they have nearly as many models as hybrids for sale now, only account for 0.9 percent of the U.S. market and were top-heavy in California which takes half of them.

SEE ALSO: 2016 Toyota Prius First Drive Review – Video

There will remain a place for hybridization in automakers’ plans which are open to and invested in all technology types, Baum said.

Still Strong

2016_Toyota_Prius_Four-Touring_000-668x409

The Prius arguably has done more to put electrified cars into mainstream consumers minds than any other car. Toyota has sold millions of them, and it is by far the best-selling electrified car ever.

The company is making no projections on what its 2017 sales will be, but meanwhile it remains the car to beat among all alternative powertrains.


More Hybrid News...